EPA, NSF, SSA Are Getting to Green

Three agencies tell the story behind the top scores they earned for making IT work for federal government.

The Environmental Protection Agency (EPA) has long
been in the business of "getting to green." Among its many other
responsibilities, it runs the Superfund, a $2.5 billion bankroll that has
been used for the past 24 years to clean up dangerous dumping grounds
of industrial wastes and other toxic pollutants.

Now the EPA is "greening" in a totally different way. It is one of only
four federal agencies to receive an excellence rating for managing
finances effectively. (Two other agencies received top ratings in three
other areas: budget and performance integration, e-government and
strategic management of human capital.)

This top rating is designated by a green
dot on a quarterly scorecard that evaluates
how successful 26 federal agencies have been
in carrying out the President's Management
Agenda. (See "Will the PMA Prevail?" on
page 44.) Launched in late 2001, the PMA
brings accountability to federal agengy
managers andcreatesa reportingmechanism
to track results. Agencies receive a rating of
green (success), yellow (mixed results) and
red (unsatisfactory).

The PMA can boast some positive stories,
like the EPA's, but widespread success—measured by how many agencies have gotten
the green designation—remains elusive. In
the latest ratings, reflecting performance
through 2003, only six agencies achieved a
green rating: the EPA, the Department of
Education, the Office of Personnel
Management (OPM), the Social Security
Administration (SSA), NASA and the
National Science Foundation (NSF), with the
last two agencies each earning two green
ratings. That's only eight of a possible 130
greens. Such ratings indicate that the federal
government is crawling, not racing, toward
greater efficiency.

So how did these agencies achieve their
green ratings? Technology lies at the core
of these successes, but technology alone
isn't enough. Leadership commitment and
deft management also play key roles, say
agency executives and consultants.

At the EPA, getting to green in financial
management involved centralization of its
financial accounting system—a project that
predates the PMA. Rather than maintaining
separate hardware and software systems
among its various divisions and departments,
the EPA worked in the late 1990s and early
in this decade to unify everything into one
agencywide system providing the CFO with
a centralized view of all agency spending.

"The words 'enterprise architecture' are
hot now, and certainly a lot of agencies are
getting up to speed with that concept," says
Kim Nelson, the EPA's CIO and assistant
administrator for the Office of Environmental
Information in Washington. But the EPA's
been at that game for a long time, predating
Nelson's arrival two years ago.

The financial system, which combines
commercial software and applications that
were developed internally, is essential to run
the Superfund. This is a particularly difficult
financial task because the government often
cleans up contaminated sites before seeking
cost reimbursements from those responsible.

"When we go through litigation, we need
documentation to show where we spent
money, how we spent it and at what hourly
rate," Nelson explains. "We have been able
to do the cost recovery to keep that program
solvent." Known internally as the Financial
Replacement System, the software consists of
a combination of internally developed and
customized commercial applications.

The NSF also earned a green rating for
financial management, along with a second
one for e-government. To reach its goal, the
NSF took advantage of its status as one of
the smallest federal agencies to "do things
quickly and do things right," says Dr. George
Strawn, CIO at the NSF's Arlington, Va.,
headquarters.

The NSF, which evaluates, approves and
monitors grants to the research community,
began developing a Web-based submission
and processing system in the mid-1990s.
After years of evolution, the agency now
processes about 45,000 grants annually,
which is about 50 percent more than when
the system was first being developed. The
number of agency staff members decreased
over the same period.

"There are a lot of areas within that agenda
that are amenable to technology solutions,"
Strawn says, including receiving submissions,
passing them on to evaluators outside the
foundation, sending responses to applicants
and archiving all documents generated by
this process.

But automation hasn't been an overnight
success, he acknowledges. The seeds of the
NSF's electronic proposal system date from
the 1980s, when the agency unsuccessfully
tried to implement an electronic system for
accepting proposals. The NSF shelved the
effort after determining that the necessary
technologies weren't mature enough yet.

The lesson learned, Strawn says, "was
that it was a tremendously complicated
thing that would require gargantuan
effort." When the Web arrived in the early
1990s, the NSF had what Strawn describes
as an "Aha!" moment. "Because of our past
work, we recognized that the technology
was ready," he says. "We immediately
launched a reinvigorated program."

The NSF continues to expand the 10-year-
old system, now called Fast Lane, with the
PMA in mind. Researchers use Web browsers
to submit all proposals electronically. Software
developed by the agency creates electronic file
folders that hold requests and their evaluations by subject-matter experts, funding decisions and progress reports for funded projects.
"Almost every step in that process used to be
a paperwork step," Strawn recalls. "It's now
automated." Most funding decisions are
made within six months of submission,
compared with eight to 12 months previously,
according to Strawn.

For the SSA, a green rating in financial
management was achieved using the system
that underpins the agency's capability to
determine benefits and issue some 40 million
checks each month. "What
we do as an agency is drive
information," says
Thomas Hughes, CIO at
the Baltimore-based SSA.
"And IT is the critical
component. How we
deploy and manage IT,
that's the rub."

The agency uses a
financial management system built on top of a commercial relational database
management system,
along with some
custom-built financial
applications developed
over several years. With
this system, the SSA staff
can drill down to review
the details of financial
transactions conducted by
any of its offices. Formerly,
such centralization could be achieved only
through a time-consuming manual process.

These three agencies, as well as the
Department of Education, all received a green
rating for their financial management. The
Education Department's improved financial
management efforts date back to 2001, when
it replaced its existing accounting system
with one that produced more accurate and
timely financial information.

The dearth of green ratings doesn't mean
that financial management isn't a priority. It's
an important area that continues to receive
the attention of managers.

Consultants and CIOs agree there isn't a
single factor that will get the PMA job done.
"Some people could be tempted to overlay the
PMA principles on their organizations," the
EPA's Nelson says, "or to treat them as
something completely separate.

"But the PMA will be successful only
when people pay attention to details: Are you
staying within your budget? Achieving your
goals? If not, why not, and what are you
going to do to change? You have to have
a clear alignment of your
investments with the goals
of the organization."

The necessity of such a
strategy is likely to become
even more obvious as
agencies tackle some of the
remaining PMA categories,
especially the strategic use of
human capital. In the
scorecards announced in
February, NASA became the
first agency to get to green
in that category.

"Whenever federal
agencies get a budget cut,
the first thing that they
generally do is cut people,
travel and education,"
says James Whittaker,
consultant and author of
President's Management
Agenda: A Balanced Scorecard

Approach. "It ought to be just the opposite,
even when it hurts. This is an area where
agencies really ought to hit a home run."

His advice to managers is to make human
capital a high-priority PMA effort now as the
possibility of tight budgets in the future could
make it harder to attract and develop talent
later on.

Another issue, says Peter Bonner, senior
vice president for human capital strategies at
ICF Consulting in Fairfax, Va., is that many
agencies confuse human capital (a senior-level strategic view of staff members and their
development) with human resources (a focus
on day-to-day issues and concerns). He
believes that agency leaders who don't take
the idea of human capital seriously are likely
to consider it a duty of the HR department,
which doesn't always demonstrate that an
organization has a high-level commitment to
viewing talent as a strategic resource. "That
[human capital] effort has to have teeth by
being managed by someone with a senior
management role," Bonner says.

The View From the Top

As agencies address each of the PMA areas,
getting to green will be linked to how well top
management actively sets the direction and
monitors progress, says Anne Kelly, director
of the Federal Consulting Group, a
Washington-based fee-for-service consulting
arm of the Treasury Department. The group
has helped the Agriculture and Homeland
Security departments, the Veterans
Administration and other agencies with their
efforts to achieve PMA goals.

When managers act as though the PMA
is just another bureaucratic task they have to
check off, "we suggest they take a step back
and consider how it fits into their overall
strategy," she says.

And that strategy should include good
communications, which is key to success. Yet
many managers try to change their business
processes without communicating those
changes to employees.

"Agencies decide something at a very
high level, then spring it on people, who are
left wondering, 'Where is this coming from?'"
Kelly says.

"You've got to be very clear about the
direction you're setting. If you're focusing on
e-government or budget and performance,
you should drive this home every time you
have an interaction with your staff."
Managers also must listen to feedback from
subordinates, who will reject change if they
feel it's being forced on them or that they're
not part of the process, she adds.

According to consultant Whittaker, it's a
problem when "federal managers worry
about the 'flavors of the month.'" Success
hinges on managers maintaining a consistent
commitment to a program
over time.

The NSF's Strawn
agrees on the need for an
ongoing commitment.
He urges agencies that
finally get to green to
remain humble about
it. "Pride goeth before
the fall," he warns.
"We're very pleased
with our ratings, but
we also know that
the bar will get
raised, and our
greens could be
taken away very
quickly."

WILL THE PMA PREVAIL?

The Office of Management and Budget (OMB), which oversees the
President's Management Agenda in the executive branch, evaluates
agency performance and issues scorecards each quarter for four of
the five focus areas: competitive sourcing, financial management,
e-government, and budget and performance integration. For the fifth
area, strategic management of human capital, the OMB gets help from
the Office of Personnel Management. Together they assign scores
based on a traffic-light metaphor: green designates success, yellow
indicates mixed results and red denotes unsatisfactory performance.
(See http://www.results.gov/agenda/index.html.)

PMA's success hinges on achieving what Clay Johnson, OMB's
deputy director for management, calls "results-oriented" federal
government. In two and a half years, proponents say, the PMA has
produced results: Retirees can conduct more of their Social Security
activities online, scientists receive research grants more quickly, and
new financial systems are more closely tracking the dollars being spent.

But, so far, reds have far outweighed greens. In the latest scorecards,
which represent performance through the end of 2003, agencies received
68 "unsatisfactory" ratings compared to only eight for "success," with the
remainder getting "mixed results." But agency executives say they're
optimistic that more greens will be awarded in the next round, pointing to
the 96 of a possible 130 greens shown on separate "progress" report cards.

No matter how many agencies "get to green," PMA directors must
ensure that the initiative becomes more than just a pet project for
the current administration. "The big question is how the administration
will keep momentum going and institutionalize the PMA," says Carl
DeMaio, president of the Washington, D.C.-based Performance
Institute, which advises government on reform and best practices.

LESSONS LEARNED

• Look for efficiencies that
result from centralizing
business applications within
an enterprise architecture

• Investigate cheaper or
more mature commercial
technologies that can
augment internally developed
applications

• Understand that technology
alone won't guarantee PMA
success

• Align investments in people
and technology with the
organization's strategic goals

• Establish senior management
control over each of the five
PMA evaluation areas

• Clearly and regularly
communicate management's
PMA objectives to people
throughout the agency

• Encourage feedback from
subordinates for ideas in
achieving PMA results.

THE PRESIDENT'S MANAGEMENT AGENDA

What it is: An ambitious Bush administration initiative to promote
efficiency and accountability within the federal government

Why it's important: If it's successful, agencies will launch more
effective e-government applications and take other steps to increase
effectiveness while keeping costs down

Who will benefit: Agencies that achieve green ratings, as well
as private citizens

Where the danger lies: Poorly performing agencies could
see their budgets cut.

THE REPORT CARD UP CLOSE

Begun almost three years ago, the President's Management Agenda has
had limited success in pushing 26 federal agencies to the highest—green—levels of performance. The OMB can give out 130 greens across
all agencies. The number of success ratings so far has been far lower:

• Total "greens" (for success) in the latest quarter: 8

• Total "greens" in the preceding quarter: 4

• Total "yellows" (for mixed results) in the latest quarter: 54

• Total "yellows" in the preceding quarter: 48

• Total "reds" (for unsatisfactory) in the latest quarter: 68

• Total "reds" in the preceding quarter: 78

SOURCE: The Office of Management and Budget

Mar 31 2004