I guess imitation is the most sincere form of flattery. First, Scotland's EPA subjects itself to program performance assessments modeled after the President's Program Assessment Rating Tool (PART). Now, the State of California is doing it. The State of California's most recent budget, as part of its California Performance Review, calls for "Program Performance Assessment and Budgeting." The State will "implement a program to make regular, detailed, and rigorous evaluations of program performance." Of course, the Administration has just concluded its second year of rigorous program evaluation, and the President's FY 2005 Budget reflects impressive growth in the extent to which performance is a factor in budget decision making and program management.

The Administration has completed PART assessments for approximately 400 programs representing approximately more than $1 trillion in Federal spending.:

• 234 programs were assessed last year;
• 173 programs were assessed this year; and
• Remaining programs will be assessed over the next three years.

The ratings:

• Eleven percent of programs were rated "Effective";
• Twenty-six percent were rated "Moderately Effective";
• Twenty percent were rated just "Adequate";
• Five percent were rated "Ineffective";
• Almost 40 percent of programs were unable to demonstrate results.

The spending:

• $123 billion is spent on programs rated "Effective";
• $590 billion is spent on programs rated "Moderately Effective";
• $145 billion is spent on programs rated "Adequate";
• Just $17 billion is spent on programs rated "Ineffective";
• and almost $209 billion is spent on programs for which we cannot demonstrate results.

All of the assessments were included with the President's Budget and can be found at www.omb.gov. What matters most, of course, is not the assessments themselves, but what agencies are doing to addressing shortcomings in program performance identified through the PART. The Administration is using performance information and PART assessments more than ever before to make decisions and improve program performance. Some examples:

• The Bureau of Economic Analysis (BEA) produces economic statistics, including the Gross Domestic Product (GDP), that enable public and private decisionmakers to follow and understand the performance of the nation's economy. The program received an "effective" PART rating and the Administration proposes additional funding for the program. With the more than 20 percent in additional requested funds, the program will improve the quality and timeliness of its economic statistics.
• The Perkins Federal Loan program, which provides funding to colleges and universities to make low interest loans available to needy students, received an "ineffective" rating. Because the program was found to be redundant of similar programs, and because those other programs were found to be more cost efficient, the Administration proposes to eliminate the program as part of the reauthorization of the Higher Education Act and redirect funds to more effective student aid programs, such as Pell.
• Although the Environmental Protection Agency's Civil Enforcement program received a PART rating of "results not demonstrated," the Administration proposes increased funding for the program. The program, which is designed to enforce Federal environmental laws, was found to lack adequate measures of compliance with laws and regulations, and funding will be used for, among other things, developing the right measures of performance.
• The Department of Energy's (DOE) Advanced Scientific Computing Research program, which provides world-class computing facilities to scientists who need to analyze and visualize the massive amounts of data that result from the modeling of complex physical and biological systems. Last year, the program's PART showed that the program did not have a sufficient strategic vision nor did it have adequate performance measures. This year, the program adopted performance measures that will focus on keeping computing costs low and focus computing usage on those computations that require at least an eighth of total computing capacity, thereby making the maximum use of the facilities' capability. These measures will routinely assess the usefulness and the efficiency of the facilities the program provides to scientists.
• The PART completed for the Trio Upward Bound Program (Department of Education), which provides intensive services to improve academic performance and college preparation for high school students, found the program was inadequately targeted to the high-risk students who have potential for college but are not performing successfully in high school. In response, the Department of Education has created a special competition among projects to award $18 million to those that serve high-risk students. The Department will monitor the college enrollment rate for these participants and will use the results of this demonstration Initiative to guide future changes in the program.

Can We do More for Less?

With the PART, we are asking not only how well programs are performing, but how efficiently they are performing. Efficiency measures tell us what results we're getting for each dollar we spend. For example:

• The Broadcasting Board of Governors' efforts to broadcast to Near East Asia and South Asia could not demonstrate that they were achieving results last year. But following the recommendations in last year's PART, the program this year set goals for weekly audience, program quality, signal strength and cost-per-listener. With additional funding, the program dramatically increased its reach to Arab speaking countries to an estimated 10.5 million listeners each week, up from just 3.9 million in 2002, and reduced the cost-per-listener from $1.22 in 2002 to just ¢.88 in 2003.
• Last year, the Administration on Aging, which provides services and benefits to the elderly so they can remain in their homes and communities, could not measure its impact. This year, the program was able to show it was moderately effective after demonstrating that its services enable the elderly to remain in their homes and communities and setting goals for increasing the number of people served per each million dollars spent. With level funding, the program plans to increase by 6 percent in 2004 and 8 percent in 2005 the number of people served per million of funding.

Are Budget Decisions Based on PART Scores?

Although performance is an important factor in decision making, it is not the only factor. Funding decisions are not made automatically based on PART assessments. For example:

• Despite the Department of Energy's Distributed Energy Resources Program's "Moderately Effective" rating, the Administration proposes a small reduction in funding for the program. The program funds research for improved energy efficiency of and reduced emissions from on-site energy production. The 13 percent decrease in funding is attributable not to the program's rating, but to relative priorities among Department of Energy programs.
• Although the Youth Activities program was rated "ineffective," the program's proposed funding remains relatively stable. The program provides formula grants to States and local areas to provide training to low-income and other disadvantaged youth to help them secure employment, but does not have the authority to target funds to the areas of greatest need. To allow it to be more effective, the Administration proposes to give the Secretary of Labor and States increased authority to reallocate resources to areas of need.

We are now working with agencies to decide what programs will be PARTed this year. In addition, we're working with Congress to ensure they get the performance information in a way that contributes to their decision making. It's another challenge in our effort to make this government a results-oriented organization.

Yours truly,
Robert Shea

• Strategic Management of Human Capital - Kay Coles James
• Competitive Sourcing
• Improving Financial Performance - Linda Springer
• Expanded Electronic Government - Karen Evans
• Budget & Performance Integration - Robert Shea