A Conversation with Clay Johnson III

Friday, October 12th, 2007 - 10:57
Posted by: 
Deputy Director for ManagementU.S. Office of Management and BudgetA Conversation with Leaders  

A Conversation with the Honorable Timothy M. Kaine

Friday, October 5th, 2007 - 11:03
Posted by: 
Conversation with LeadersA Governor of the Commonwealth of Virginia

Clay Johnson, III interview

Friday, August 24th, 2007 - 20:00
"Most people think about government work as focusing on what the policy ought to be, and the key is how a policy is implemented, which gets into how money is spent and how an agency is managed. I think it's really, really important."
Radio show date: 
Sat, 08/25/2007
Intro text: 
Managing for Performance and Results; Financial Management; Leadership; Collaboration: Networks and Partnerships; Strategic Thinking; Organizational Transformation ...
Managing for Performance and Results; Financial Management; Leadership; Collaboration: Networks and Partnerships; Strategic Thinking; Organizational Transformation
Complete transcript: 

Originally Broadcast Saturday, May 19, 2007

Washington, D.C.

Welcome to The Business of Government Hour, a conversation about management with a government executive who is changing the way government does business. The Business of Government Hour is produced by The IBM Center for The Business of Government, which was created in 1998 to encourage discussion and research into new approaches to improving government effectiveness.

You can find out more about the Center by visiting us on the web at

And now, The Business of Government Hour.

Mr. Morales: Good morning. I'm Albert Morales, your host, and managing partner of The IBM Center for The Business of Government.

Good government, a government fiscally responsible to its people, must have as one of its core purposes the achievement of results for its citizens.

Shortly after taking office, President George Bush put forth a bold new management agenda, the President's Management Agenda, or the PMA. The PMA underscores the critical importance of performance, accountability, and results in government management, and it's premised on the belief that citizens have the right to hold the federal government accountable for its performance.

The management reform efforts under the PMA have sought to provide clear, candid and up-front information about federal government programs' successes and failures.

With us this morning to discuss the success of these efforts is our special guest, Clay Johnson, Deputy Director for Management at the Office of Management and Budget.

Good morning, Clay.

Mr. Johnson: Good morning, Al.

Mr. Morales: And joining us in our conversation is John Nyland, managing partner for IBM's Global Business Services in the Public Sector.

Good morning, John.

Mr. Nyland: Good morning, Al.

Mr. Morales: Clay, as the Deputy Director for Management within the Office of Management and Budget, you provide government-wide leadership to the Executive Branch agencies to improve agency and program performance.

Clearly, this is no small feat.

So I'm curious, with such an extensive and critical charge, could you tell us about a typical day or week, to the extent that there is such a thing, in the life of the Deputy Director of Management?

Mr. Johnson: I was asked this question a couple of weeks ago and I really didn't know how to answer it, because I don't think there is a typical day or week. But it caused me to go back and look at my calendar over the last six, eight months, and I was surprised to find out I spend 50, 60 percent of my time in meetings. I knew I spent a lot of time. I didn't realize it was that much.

About a half a day a week is spent getting the word out to either employee groups at specific agencies or general employee groups or to talking with the press.

And the rest of the time is spent at my desk, at my computer. E-mail. I get a lot of questions, a lot of issues come to me. One of my goals is to give people very, very fast, detailed, clear feedback to questions. A nut about it. And so one of my goals is the end of each day, that there are no unanswered e-mails.

So a lot of meetings, a lot of interaction with other people. It's a very busy job.

Mr. Morales: From leading the Bush Administration transition in 2000 to your four-plus years as Deputy Director for Management at the OMB, the President has looked to you for your management prowess to improve the performance of the federal government.

Could you give us your insight into the mission of OMB, but more importantly, could you elaborate on the widely held perception that you have single-handedly elevated the focus on management within OMB, so it really is the Office of Management and Budget.

Mr. Johnson: Well, we joke in the M world at OMB that it's time to put the B back in OMB; that M has gotten to be such a significant part of it. And it really is. It's a much bigger part of the way the entire staff spends their time then it was, say, eight, ten years ago. But I'm not the one that's put the M back in OMB. It's the President that's put the M back in the federal government. It's a priority for him.

Shaun O'Keefe and Mitch Daniels and Mark Everson designed, developed the PMA back in 2001 with the President's endorsement, and it was a campaign promise of the President's to come here and to work with federal employees to cause -- to help the federal government be more effective.

It was a job that I sought out because I like fixing things and seeing things work better. So it all starts with the President.

The people know that when I'm speaking, I'm speaking for him. When I'm talking about the importance of management, I'm talking about a priority for the President. So he's really the one that's caused it to be a priority.

The thing that helps me in this job is I was the head of Presidential personnel before I came into this position, so I knew all the leadership in the different agencies. So I had a lot of credibility with them and they with me, and so when I call, they know who I am, and my relationships with all of the Cabinet leadership helps I think put the PMA into effect.

Mr. Nyland: Clay, speaking of the President, he has called upon you in several instances during his two terms to lead and manage critical initiatives that are very closely tied to his legacy.

Could you elaborate a little bit on your leadership and management approach, and maybe how your breadth of private and public sector experiences has prepared you for your current leadership role?

Mr. Johnson: Yeah, John, I've had a really fantastic professional life. I've been challenged in different areas -- the for-profit and not-for-profit world, and the different kinds of industries and companies. And to me, one of the things I've learned is that the key is to go in and find out what it is we're trying to accomplish. What is the definition of success? What are our goals? What is the real output we're trying to create?

If we're spending money, what are we buying? How are we going to buy it? And how are we going to assure that we get what we pay for?

So key is let's be real clear about what our goals are.

A second key I think is in terms of management in general is I think the best definition I've ever heard of a manager -- and this is the way I try to approach it is -- my job is to help the people that work for me be successful, not vice versa.

One of the things I make sure of is the four or five people that work directly for me are the best that I can find. They are particularly well-suited to accomplish what I think needs to be accomplished in the next two, three, four years, the typical length of time that someone has a job in the federal government, and that they have lots of expertise, and then I help them be better than they might be without me there.

So it's a lot of helping and assisting. That's also the approach that I take working with the agencies. The agencies are not there to help me accomplish a Presidential management priority. The President's Management Agenda and I are there to help the agencies be more effective at serving their customers.

So I think those two general principles I find myself applying to everything I've been involved in.

Mr. Nyland: Now, you've acknowledged that those federal programs that have received positive OMB assessments share at least one common characteristic; that is, a clear definition of success.

Could we turn that around a little bit, and would you elaborate on what the clear definition of success was for the President's Management Agenda as it began?

Mr. Johnson: The original language that was associated with the PMA talked about wanting the government to focus on results instead of process and control. If you think about what the word "bureaucrat" means, it means attention to the rules. They are rules, and we're trying to get people to comply with the rules.

That is a traditional way to think about the government. The government really, though, is in the "get it done" business. There are certain things it's trying to accomplish for the benefit of America and taxpayers and citizens. So it ought to be not about controlling what goes on in the federal government. It ought to be about getting things done.

So that was one goal. Another goal was to focus on what does it cost to get things done, and bring a cost consciousness focus on efficiency. And also minimization of duplication. We have a lot of programs, for instance, that work on job training, a lot of different programs that work on community and economic development. Are they working in concert with each other? And sometimes are they working in conflict with each other?

And also to strengthen the ability of the government and employees to perform. We might be highly motivated to do a really good job at managing the federal government, but if we don't have the basic abilities to do so, all that motivation is for naught.

So a lot of the President's Management Agenda is about the ability to cause your agency or your program to be more effective.

Mr. Morales: Clay, along similar lines, going back to the agencies for a moment, you've been on record as identifying four key elements for federal agencies to be successful under the PMA.

Could you tell us about these four characteristics?

Mr. Johnson: Yeah. I started thinking what's the difference between an agency that's doing well and one that's not doing well? Every quarter, we have what we call scorecard meetings, and we talk about the 26 agencies that we focus on in the PMA, and for a couple of these quarterly meetings, I started thinking why are some agencies doing a good job and some not, or some that used to be doing a good job not doing a good job now.

And all of sudden, it dawned on me that there were four key things, as you mentioned. The ones that are doing well have a real clear definition of what they're trying to accomplish, whether it's in financial management or competitive sourcing, or human capital practices. They have a real specific, realistically aggressive action plan, with due dates, key milestones when certain things are supposed to happen.

They have clearly defined accountability. Who is responsible for doing this to whom by when? And it's not what department. It's not what consulting company we're going to hire to come in and do this for us. It's what specific individual, and as long as we're writing down his or her name, let's write down their phone number and e-mail address just in case we want to call to see how they're doing on it.

So that's the third thing.

And the fourth thing is, it has to be real clear to everybody that this is important. It's important to either the President or it's important to the head of the agency or the head of my department.

So all four of those are about clarity, clarity of purpose, clarity of method by which we're going to get there, clarity of accountability, and clarity that it's a priority, and therefore, somebody very important wants it done.

When you have those four elements a hundred percent of the time, in the PMA anyway, people accomplish their goals. You miss one of those or more and a hundred percent of the time it doesn't get done.

It seems overly simplistic, but that's been my experience with it.

Mr. Morales: How does achievement on the PMA translate into better agency performance?

We will ask Clay Johnson, Deputy Director for Management at the Office of Management and Budget, to share with us when the conversation about management continues on The Business of Government Hour.


Mr. Morales: Welcome back to The Business of Government Hour.

I'm your host, Albert Morales, and this morning's conversation is with Clay Johnson, Deputy Director for Management at the Office of Management and Budget.

Also joining us in our conversation is John Nyland, managing partner for IBM's Global Business Services in the Public Sector.

Clay, let's revisit the PMA and the now well-known traffic light scorecard, which represents a method for tracking and guiding the federal performance efforts.

Under this rubric, getting to Green and sustaining the Green status is critical.

But what happens after all have achieved a Green status? How does all this Green, so to speak, translate into agencies and programs working better and continuing to work better? And if I may, what lies beyond the Green?

Mr. Johnson: That's a good question. In fact, it's a question that the President has asked the management people at each agency twice now. The management people at each of the agencies meet with him once a year to brief him on what we're doing, and two years ago, he said, what happened -- the same question -- what happens when the agency gets to Green? What happens then?

And this past year, he challenged us. He said -- because we talked about how we were getting more Green at each agency. He said, that's great. But you make sure all that Green is converting into agencies working better, not only for the remainder of the time that we're here, but beyond.

What the PMA is about primarily is about agencies developing the ability to be more effective, to develop human capital practices, cost management practices, investment management practices, particularly with IT, financial management practices, and program management practices that, with these abilities and with the motivation to serve the taxpayer and the citizen at a higher level, you can do so.

But just having the ability does not necessarily mean that your programs are going to work better. We've all known of athletes that were very gifted but they never could convert their gifted athletic ability into performance on the field or on the court.

So the President's charge to us we interpreted to mean let's get more Green, let's develop the ability to do well, but then let's make sure the leadership of the agencies are using these new-found abilities to cause their programs to work more effectively, which makes me think that the most important aspect of the President's Management Agenda is what we call the Budget Performance Integration Initiative, which is the effort by which we make sure that we have good definitions of success for each program, both performance objectives and cost efficiency objectives, because when we're trying to get better, the first question is, how do we measure success? And if we don't have good measures, we can never be held accountable or never document or demonstrate that we're getting better.

So one of the things we've developed over the last five, six years is better metrics so that we can more effectively focus on our programs getting better.

The challenge now is being able to convert it to programs working better, and demonstrate it, quantify it.

Mr. Morales: Now, in the last OMB Scorecard, as I look at the breakdown, it appears that of the 15 major Cabinet departments, the Green status tends to be concentrated in many of the smaller departments, such as Labor, State, Education, and Transportation, while the bigger departments -- Defense, Homeland Security, VA, Justice, and Treasury -- seem to have most of the Yellows and Reds.

Why are the biggest departments, with more people and supposedly more resources, apparently lagging behind some of the smaller agencies?

Mr. Johnson: Well, it is true that size and complexity is an issue. The Defense Department is the largest, most complex organization in the world of any sort, so that's a challenge. And the Department of Homeland Security is the combination of 21 or 22 agencies, and so it's still going through some growing pains. The size and the complexity of those organizations has a big impact on their ability to develop the Green level of management capability that they and we aspire them to have.

The biggest issue is not size and complexity. The biggest issue is leadership and attention to detail and attention to these matters. I wish I could say that all of the big agencies' Yellow and Red are the result of size and complexity. A lot of it is that they just haven't paid as much attention to it, or haven't been as good about addressing their management opportunities as some of the other agencies. There are too many examples of big complex organizations doing a great job, and equally sized organizations not doing as good a job and it's -- the size and complexity are the same.

So we don't give the big agencies a pass just because they're big and complex. It's all about those four things I was talking about earlier. It's clear definition of success and action plan and accountability and making sure everybody knows it's important, whether we're are war or not or whether we're under attack or not, how we manage our resources and our people in all of our agencies has got to be a 24/7 priority.

Mr. Morales: Now, along the same lines, in the last OMB Scorecard, about half of the federal agencies -- about half -- received a Red rating in financial performance. Could you tell us from your perspective why this is such a challenging area for federal agencies?

Mr. Johnson: A lot of agencies, like DoD, like HHS, like Homeland Security, can't get to a place where they and we want them to be on financial management until they have a brand-new, many-years-to-develop financial management system. It takes a lot of money and it takes a lot of attention to detail and a lot of commitment.

You've got to know where you're spending the money and be able to account for it and be able to get good, accurate cost information in front of managers, and a lot of those agencies did not have the financial management systems to be able to do that. So they're in the process of developing those.

So that's the substantive reason why. The other sort of scoring reason why is, it used to be a little easier to get to Yellow and then a little harder to get to Green, and we changed what it meant to be Yellow a couple of years ago, which means when you go from Red, you go immediately from Red to Green. There is no Yellow in financial management.

There are a lot of things that are being done in the financial management area that people thought would never happen in the federal government. If you had asked anybody that knows anything about financial management in a large organization -- if asked if the federal government could close its books and issue its audited financial statements in 45 days, if you had asked them that 10 years ago, they would have laughed. We've done it for two years running. The private sector takes 75 days to issue their audited financial statements. We do it in 45. Unbelievable.

Six years ago, the Ag Department had never had an unqualified audit opinion. In its 140-year history, it had never had an unqualified audit opinion. The Chief Financial Officer asked why and nobody knew why. They just knew that it was impossible.

One year later, they had a clean audit opinion, and they've had one ever since. Wonderful things have happened in the financial management area. More things still to happen. We're managing real property in ways that no one thought possible. We're formally reducing improper payments in ways no one thought possible.

But you're right, there's more Red in the financial management area than anywhere else, which kind of disguises some of the big gains that are being made. But that's the way it is and we live with it.

Mr. Nyland: Clay, OMB's website has been primarily a place for OMB to post the results of the quarterly PMA Scorecard.

Could you tell us about the recent re-launch of the site, and how does the new site enable the exchange of ideas between federal employees about good management practices?

Mr. Johnson: We realize that this website was all about the ability to do well; about getting to Green; about improving our ability to become more effective, and there was an opportunity to focus it on taking all these abilities and in fact causing programs to work better.

So we decided to change it. We had matured and we needed to focus on getting beyond Green, as we've talked about.

And we created three sections, which is -- one section which identifies programs that have used various PMA abilities to cause them to be more effective. They used to perform at one level and they saw opportunities to make it better -- when I say "they," I mean federal employees. They took action. They've made changes in the program, and now it's working at some improved level of performance.

That's one new section on the website.

Another new section is keys to success, management keys, teamwork keys. And a third section is obstacles that exist out there that people should be mindful of and should work with us and Congress to remove. So there are things that help us be more effective; things that get in the way of us being more effective, and then examples of us overcoming all these challenges and causing our programs to be more effective.

So we're very excited about it. It's, and we think it's the way the site ought to be focused now given where we are after six years of PMA.

Mr. Nyland: That's great. Could you tell us a little bit about the President's Management Council, or the PMC? It's our understanding that President Bush has attended several PMC meetings, being briefed on real, meaningful results. Perhaps highlight some of those real examples of meaningful program performance -- and I understand that there's an interesting story from the Interior Department about feeder mice.

Mr. Johnson: Feeder mice, my favorite story.

Three years ago, I guess -- we've done it three years in a row now -- we had the President meet with what's called the President's Management Council. This is a group that was formed I think formalized by Executive Order in the -- maybe in the Clinton Administration, and then we carried on the tradition, where you take all the Chief Operating Officers and all the senior management officers in the agencies and they meet every other month to talk about issues and opportunities of common interest.

It's typically the Deputy Secretaries in the large agencies or the Under Secretaries for Management and in the smaller, independent agencies, like GSA and OPM, it's the heads of those agencies.

And so this last time we were, apropos of getting beyond Green, we were not talking about improving competitive sourcing and human capital. We were talking about programs working better. And we talked about big, big changes like FAA, a very large organization where there had been a lot of wasteful spending, a lot of cost overruns. Management came in -- and I don't mean just political management, I'm talking about political career -- looking at this and deciding that there were opportunities to run FAA better.

They saw the opportunity to consolidate offices. They installed a new financial management and cost accounting system. They improved individual managers' accountability for service levels. They developed better service metrics. They competitively sourced their flight services operation. There was a lot of dissatisfaction with the service level and the cost being provided to private aircraft operators. They renegotiated a labor contract, and they looked at their staffing levels, and the results were that they improved customer service from 54 percent approval rating to 77 percent approval rating in a couple of years. They improved their savings of their operation $200 million for the year, and they improved agency performance significantly. Just really sort of an agency-wide effort.

At the other extreme, you had the feeder mice story, a great story. I've told the people at the Interior Department when I visit with them -- I said if this story is not true, don't tell me. It's too good a story. I want to believe that this story is true. No one has denied it, and Lynne Scarlett, who's the Deputy Secretary over there, swears that it's true.

But there's a Chickasaw National Park or Chickasaw Recreational Area in Oklahoma. And the Interior Department had given their managers better cost information about where they were spending their money, and then challenged all their managers to think about their mission, really think much more single mindedly about what business they were in and look at how they were spending their money and think about spending more money or as much money as possible directly against their mission versus indirect monies against their mission. And the more money you can spend directly against your mission, the more focused on your mission you'll be.

So they're in the business of providing recreational opportunities for citizens, and they also have two endangered species there. They have an endangered snake and an endangered owl there that they keep fed.

So they looked in great detail with new information about where they're spending money, and they realized they were spending a lot of money raising mice to feed these endangered animals. And it struck them that this is really -- these mice were really expensive to raise. And someone asked the question what could we buy mice for? And they determined they could buy mice cheaper from the pet store than they could raise them. They realized well, we're not in the feeder mice raising business. We're in the endangered animal preserving business and in the recreational opportunity business. So they stopped raising mice. They bought the mice from the pet store. They reduced their costs $15,000 a year and took those savings and spent it to improve the quality and quantity of the trails through the wilderness area.

So just a great story. Fifteen thousand dollars a year, not $15 billion, $15 million, but it's the same. It's the principle. And it was all done by the management given the charge to think about how you can spend even more of your money directly against your mission versus on indirect costs, and they came up with just a classic way to do it.

So one of our big challenges in the federal government is look for the feeder mice example in every agency, large and small.

Mr. Morales: Clay, let me switch gears a little bit here. In 2003, OMB initiated its program assessment rating tool, which is commonly referred to as the PART.

Could you tell us briefly about the PART, what is its purpose and scope, and how has it introduced a new level of transparency and led to a more citizen-centric approach to government?

Mr. Johnson: The PART was developed in 2001 under the leadership of Mitch Daniels and Shaun O'Keefe and Mark Everson. And when they wanted to focus more and more on the effectiveness of programs, they realized there was no consistent way of evaluating programs, and there was a lot of programs couldn't tell you whether they worked or not.

And so that -- it was just develop a number of questions that we should ask ourselves about every program that every small businessman, every large businessman, every non-profit organization either does or should be asking themselves -- what's our purpose? How are we set up to achieve that purpose? What sort of plans do we have for the future? What's the quality of our management? How do we define success? What are our performance measures? How accountable do we hold ourselves, or are we held accountable for those results?

These are commonsense 25, 27 questions that are not esoteric. They just -- any organization ought to be asking themselves about it, and you can ask of them Defense programs, Interior programs, Social Security programs.

So it's a consistent set of questions, a way to get a feeling for whether programs work or not. If they don't work to our satisfaction, if we don't have satisfactory answers to all those questions, where are there shortcomings? What do we need to work on to cause a good program, a medium program or a bad program to work better?

So the purpose is give us some consistency, give us a way to compare program effectiveness across the board, and then to do so in such a way that it allows us to focus on the things that need to be fixed to make the program work better.

Mr. Morales: How has OMB's Program Assessment Rating Tool changed the way government does business?

We will ask Clay Johnson, Deputy Director for Management at the Office of Management and Budget, to share with us when the conversation about management continues on The Business of Government Hour.


Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and this morning's conversation is with Clay Johnson, Deputy Director for Management at the Office of Management and Budget.

Also joining us in our conversation is John Nyland, managing partner for IBM's Global Business Services in the Public Sector.

Clay, continuing with our discussion on the PART, how have federal agencies dealt with the requirements of the PART, and what strategies have they employed to be successful, and what are some of the challenges that they continue to face today?

Mr. Johnson: I'm going to give you a little bit more of a historical answer than maybe you asked for, but initially, there was a lot of skepticism about the PART, because they thought that -- and analyzing programs was code for let's get rid of programs that the Administration is not interested in and blame it on performance.

So there was not enthusiastic acceptance of the PART for, say, the first 12 months of the President's Management Agenda being in effect. But then agencies and federal employees began to realize that this was about programs working better, programs that were priorities, and programs that were not priorities, working better. There's another process for deciding whether we get rid of programs or not.

But in the management world, we want all programs to work. We want great programs to work even better, and we want bad programs to work at an acceptable level.

So their initial response was reluctant participation, and then it became enthusiastic. And one of their big challenges initially was to develop measures of success.

In the first year, when we evaluated 20 percent of all the programs in the federal government, half the programs evaluated in that first year could not demonstrate a result, either positive or negative or neutral. The reason for this was nobody was asking. Nobody was asking what have you done for me lately. How are you performing as an organization?

So what agencies have probably spent the most time on in the last five, six years as a result of the PART is get clearer definitions of success. You can't hold employees at the lowest level, the medium level, or the senior manager of a program responsible unless you can define clearly what success is.

I think that's what the most of the energy has been focused on is let's clearly define success and then develop action plans for developing an approach of accomplishing success.

Let's develop relevant measures of performance, and what this allows us to do is it makes the PART relevant to great programs, medium programs, and bad programs. It's not just a tool for programs that are performing at an inadequate level. It's a tool for every program, because we want every program to work better than it did the year before.

Mr. Morales: So let me explore this a little bit more. How does a program's PART score influence, say, its budget, either in the President's budget recommendation or the Congressional considerations? And what effort is the Administration making to generate interest in program performance on the Hill?

Mr. Johnson: I think there's a tendency to believe that its primary purpose, the primary purpose of the PART, is to help set the program's budget.

It should be a major piece of information that appropriators and OMB staff look at when they recommend and agree on a budget, or disagree on a budget.

But performance should be an issue. Nothing should happen automatically because a program performs or doesn't perform. Sometimes a program doesn't perform because it's brand new and it's hard, and we don't know how to slay the monster and so we're working on it. And sometimes we're not spending enough money on key aspects of the program's operation for that to be successful, and so in some cases, we have recommended that spending be increased to cause it to be more effective.

So nothing should happen automatically because a program works or it doesn't. Some people would like to have programs automatically go away or be expanded based on whether they work or not. That should not be the case.

The primary purpose of the PART is to help management and people who oversee the program's performance in Congress work together to cause it to be more effective. And a secondary, but very important use of it, is to inform the budget process.

Now, you asked about what are we doing to work with members of Congress. Some members of Congress understand program performance. They get it. They're behind it. They like it. And their constituents expect them to pay attention to how the taxpayers' money is being spent.

Other members of Congress fear it. They would prefer not to have to factor in whether a program works or not. It's more difficult. It's easier to pay attention to how much money you're spending on a program than it is to pay attention to what we're getting for the money. And maybe their constituents are less interested in whether programs work or not. They're more interested in how much money we're spending on a given program.

So when we talk about the Hill, the Hill is a combination of 535 different viewpoints about program performance. Every committee, every authorizing committee, every appropriating committee, is different. And so what we are doing to work with members of Congress is to work with every committee in the ways that make sense for them.

Some of them are very receptive. Some of them have been very reluctant to talk to us about program performance. Some used to be reluctant. Now, they're receptive. Some are still reluctant. Some have been receptive and now they're enthusiastic. So they all have different needs. They need better -- different levels of communication, education. We need to show them how it can help them be better Congressmen or Senators. How it can help them better serve and represent their constituents. And so it's a big educational challenge and opportunity to do it right for the agencies and for OMB, but every member of Congress and every committee is different.

Mr. Morales: Now, along these lines, I've heard that some agencies have expressed concern over the fairness or the consistency of the process, and in particular their PART scores.

Is this due to the inherent nature of the programs these departments operate? Is it related to something else, and is there a specific PART appeals process, so to speak? And if there is, how does this work?

Mr. Johnson: Well, the validity and the objectivity of these PART scores is a big priority. If they are known to be biased or developed haphazardly, then there's no reason to pay attention to it. And so we made this a priority from day one. Every year when PART scores are developed, there are consistency checks. We also then compare these similar programs across agencies to see that they're being evaluated consistently.

So we do a lot of checking on the validity and objectivity of these, and we've gotten better at it. I think the scores we have now in years four and years five are probably more objective than they were in years one and two. But there's a lot of attention being paid to that.

There is an appeals process. If you are in disagreement in an agency with your OMB counterparts over the score, we create an appeals board every year that I chair, and we get Deputy Secretaries from two or three agencies or the head of some of these smaller independent agencies and very detailed briefing books are prepared and they go over the material. They review it, and we make decisions, and sometimes we change the PART scores, and often we accept it. But a lot of effort goes into this appeals process, and it's a really commendable process.

So I think there might be some general grousing about objectivity and so forth, but I bet by and large, the acceptance of the PART scores is very, very high.

Mr. Nyland: Clay, in February of last year, OMB unveiled a new website, Can you elaborate a little on, and what's the purpose of this site? What does it contain, and are there any plans to expand its application and use in the future?

Mr. Johnson: We are very excited about Expect More. We think it's a really neat concept. One of the things we try to do is to get Congress to pay more attention to whether programs work or not and interest groups to more pay attention to whether programs work or not, and agency personnel to pay more attention to whether programs work or not.

And we realize well, one way to make this happen is to make all this performance information really, really public, really unavoidable. You can't pretend that the information about a program not working isn't out there. You can't pretend that a program doesn't work because it's known to one and all that it does if this information is really public.

So this information had all been in the public domain. You had to really know where to go it. You had to be able to read OMB's version of English. So we decided we would make it much more public and much more readable by a lay audience, and so a lot of effort went into doing this. And we decided we would call it, thinking you should expect more from your federal government. You have a right to know how your money is being spent and where it's being spent well and where it's not being spent well, and in every case where it's being spent well or not, in every case, what we're doing to make it work better.

We did focus groups with people, asking them to review some of our write-ups, and got great feedback about what they understood and didn't understand and the kind of information they would pay the most attention to.

One of the things that we found out from these focus groups was we asked them if they would expect to get information from the federal government about how programs worked. And we did four focus groups, and about half the people we talked to said, yeah, they would expect that from the federal government.

And then we asked them if you got information like this from the federal government, would you expect it to be objective. Nobody, not one person, thought it would be objective. The thing that that told us these better be really clear, clearly written, very substantiatable, all kinds of checks and balances, all sorts of quality control, because the readers are going to be Doubting Thomases. They're not going be inclined to believe this. They're going to be inclined to view it as one Administration trying to sell its particular agenda to the American people.

So it has created lots of attention in Congress. We've had authorizing committees call us and ask about the programs that don't work, and we've asked them why are you asking us this, because they said we want to spend all of our oversight hearings focusing on these programs that don't work. Bingo. That's it. That's the thing. That's the answer.

Gallaudet University, which had some difficult leadership difficulties and challenges installing a new president and a lot of unrest amongst the students, was evaluated to be a program that was ineffective. It receives a lot of money from the federal government. It graduates 42 percent of its students. That's unacceptable by anybody's standards.

So it was made very public that Gallaudet was rated ineffective via the PART. It confirmed what a lot of students were saying, which was our school needs to be better than this.

So it became one of the things they referred to in their laundry list of things they thought needed to be fixed at Gallaudet. And I guarantee you as a result of the PART score and a lot of other gripes that the students had, there's been more conversations about how to make Gallaudet the wonderful university it used to be and can be in the last couple of months than maybe had taken place in the past many years.

So the idea is to prompt behavior and prompt discourse about whether things work or not, and if they don't, what are we going do about them. And if they do, what are we going to do about them to make them work better?

Mr. Nyland: You know, some at OMB have said that is the widest and deepest resource on the effectiveness of the federal government on the web.

I understand the publishing of successes, but what really is the benefit of disclosing failures or highlighting those programs that are in Red or Yellow status?

Mr. Johnson: I love that question, because I've had very senior members of this Administration ask me directly and ask other people why on earth are we making it public what doesn't work? And my response to them is, well, first of all, let me ask you: do you think the American public really believes that all this stuff works? I think the American people are shocked to find out that as many of these programs work as we say they do. They know a lot of this stuff doesn't work. So they're not surprised by some things work better than others.

When by saying that this works and this doesn't work, we're saying we are committed to fix everything. When we talk about a program that doesn't work and here's why it doesn't work, what we're saying is we know why it doesn't work and this is what we're going to focus on.

If we have a program that works great, we say here are the things that could work even better, so here's what we're going to do to make it go from great to fantastic.

People give us so much credit for the candor and the commitment to doing well by talking about our successes and our failures that the benefit of that far exceeds some unrest that might be stirred up by talking about some parts of the federal government that don't work.

So it's critical. You have to be honest about where you are. You have to be honest, whether you're talking with an individual employee about what they're doing well and not, and you have to be honest with a leader of a program or a leader of an agency about what's doing well and not.

Everything at HUD and at Interior and at Ag and the Defense Department don't work the way they should. Some things do. Some don't. Let's call them for what they are and focus on everything working better, but be targeted about what it is we're trying to fix.

Mr. Morales: That's fantastic.

What does the future hold for the PMA, the PART, and other government management reforms?

We will ask Clay Johnson, Deputy Director for Management at the Office of Management and Budget, to share with us when the conversation about management continues on The Business of Government Hour.


Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and this morning's conversation is with Clay Johnson, Deputy Director for Management at the Office of Management and Budget.

Also joining us in our conversation is John Nyland, managing partner for IBM's Global Business Services in the Public Sector.

Clay, if you were contacted by the OMB Transition Team in 2008, what might you recommend they do in the areas of performance management or the PART, and how might they try to institutionalize the management reform efforts that you've started?

Mr. Johnson: That's a very good question, and we talk about it now because we want to have all this work carry over to the next administration, because it's really not about Republican goals or Democratic goals. It's about goals, and having clearly defined outcome goals and having a way to focus people's energies and attention on getting them accomplished in a reasonable period of time.

What I would advise any new administration to do, and what we're going to do with them, is to say when they come in is to say here are the goals that each agency and each program management team are being held accountable for accomplishing now.

And their performance evaluations are tied and their bonuses and their salary increases are tied to whether or not they accomplish these goals. So one of your big responsibilities coming in new is to decide whether these are the goals that you want them to focus their energies on accomplishing, and if not, what are the goals?

But without regard to what they are, there need to be very clearly defined outcomes that management can be held accountable for accomplishing, not because they'll be wayward if they're not held accountable, but because they want to be focused. They want to do a good job of serving the American people -- they, the career employees. They're not afraid to be held accountable, but they want there to be a good clear agreement on what the definition of success is, and then they want to be given the resources necessary to accomplish those goals and have some input on what those goals are.

I would encourage him to think about management as being about effective government, not about large or small government. But whether you're Republican or Democrat, everybody should be interested in how effective the programs work; how effective our government is.

The other piece of encouragement I'd give to them is when you are talking about management to federal employees, talk about work with them. Do this with them, not to them. The key to the success of any management agenda is that it be viewed as being good for the employees. If employees don't want something to happen in an agency, they win. There's a million nine of them and there's a couple thousand political appointees, and it won't last.

But if employees -- federal employees, career employees, understand that a particular management agenda is good for their agency, it will help their agency be more effective, as I believe they feel the PMA is, they will endorse it, they will support it, because they want their agency -- HUD or Defense or Homeland Security or VA -- they want their agency to be effective. They want, by and large, to be an effective public servant, and they want to have improved ability to do so, and that's what the PMA is about, and that's what the next administration's management agenda should be about as well.

Mr. Morales: So more specifically, how does the current status of the PART, say, compare to where you might have envisioned it going five years ago, and are there areas that you think need more attention going forward?

Mr. Johnson: My understanding is that the group that developed the part in 2001 thought that there would be more purposefulness as a result of the PART, there would be measures that could be used to drive more specific behaviors in a program as opposed to broader general behavior.

My understanding is that the developers of the PART in 2001 did not foresee our being as public with it as we have made it. But they've applauded it.

The birth mothers and fathers of the PART give us big kudos for taking it to the public and making it unavoidable by the interest groups and by members of Congress. The one thing that they have envisioned that we haven't done as much of, which is a priority for the next two years, is to use this information to look at cross-cut areas. And the PART allows us to look at all the programs dealing with a similar subject, and bringing some better sense to how they work in concert with one another; maybe combine some programs and so forth.

That's something we want to do more of, particularly in the next two years. But the PART allows us to do that, and we need to take advantage of that opportunity.

Mr. Morales: Clay, I'd like to ask you about bloggers for a few minutes. The world of bloggers and the passage of the Transparency Act really represents a small but significant change in the culture here in Washington, D.C., and may suggest there may be new ways to focus attention on management issues that would have escaped attention in the past.

What plans does the Administration have to take advantage of these new developments?

Mr. Johnson: What we are doing is making everything a lot more transparent. We are making our PMA status and progress -- have for the last six years -- very public with the Scorecard. We are making program information, program performance information, very public, with

There is tremendous transparency that didn't exist before. One of the things we have to be able to do is to make it transparent, but also make it transparent in such a way that if someone wants to go and really analyze this and try to make sense of it, the data is analyzable; that they can download large sums of data and run it through different analytical programs to suggest that we ought to do more of this and less of that or whatever.

Bloggers talk about wanting to do that. A lot of think tanks talk about wanting to do that. There are good bloggers and bad bloggers, just like they're good reporters and bad reporters. But there are a lot of ways, a lot of commentary that can move mountains, and some of it's been coming from the blogging community.

The blogging community was instrumental, critical to the passage by Congress of the Coburn-Obama bill that calls for all this procurement and grant information to be made public. The bloggers said we deserve to know this, and they let their Congressmen and Senators know it, and they responded by approving the bill.

So they're an important public information source, and what they want is information that they can look at and analyze.

Mr. Nyland: Right. You've been quoted as saying that the average agency is better managed today than the best managed agency was back in 2001.

That's a very powerful and bold statement. Could you elaborate on this insight and what challenges lie ahead for the next administration and the agencies?

Mr. Johnson: The reason I say that is I look at that Scorecard where we look at how agencies are performing, and there are 26 agencies, and there are five key management areas that we look at. So there's a 130 scores, five times 26.

In 2001, there were 110 Red scores and two or three Green and the rest Yellow. A Red score means our financial management or human capital or whatever their area's ability is totally unacceptable. 110 out of 130 were totally unacceptable.

Today, out of the 130 scores, approximately half are Green and 30 percent are Yellow; 20 percent are Red. So the average agency today is sort of a Greenish-Yellow agency, to use the PMA parlance, and six years ago, it was a bright, bright Red.

So that leads me to conclude that our ability to manage our resources and to accomplish desired outcomes is better today on average than the very best agency was six years ago. And it's not easy being Yellow. And it's really not easy being Green. Anybody that knows anything about managing an agency looks at what the criteria are for being Green and they don't ever challenge it. And the process by which we give out the Yellows and Greens is very stern and very stiff, and it doesn't require a lot of subjective interpretation. You either have achieved the desired performance on activities or they exist or they don't exist.

But all of these have been hard-earned Yellows and Greens, and so agencies have really done a good job.

You asked about the best way to institutionalize this going forward. I think the one simple thing, if you're only going to focus on one thing, is make your reforms good for the employees. If it helps the employees do better work, it'll stick and it'll cause the work to improve. You say, well, performance goals, you know, holding agencies more accountable, clearer performance metrics or clearer efficiency metrics, doesn't that put federal employees under the gun? Doesn't that make them more apt to fail?

That's not how employees think of it. Employees describe that as they want to be held accountable. They want clearer definitions of success, because one of the things they want is they want the opportunity to brag when a program performs well, or some of their attempts to improve performance pay off and they've raised the level of performance.

Every incoming administration talks about how dysfunctional the federal government is: elect me; I'll come in and make it work. So they tend to run against the federal government. The federal employees are much maligned by all incoming administrations. If you have clear definitions of success, incoming administrations can't get away with that. There's more specific information you can point to about this works, but this doesn't work, and here's what we're doing to make it work better.

So there's more purposefulness. There's a more adult debate about if something doesn't work, how much doesn't it work and why doesn't it work, and there can be more intelligent, corrective action plans put in place to make everything work.

Mr. Morales: Clay, I want to flip the lens a little bit here, and you just gave me the perfect segue. OMB has a reputation of being a very demanding and stressful place to work. And yet it's also achieved the number one ranking in the Partnership for Public Service's "Best Places to Work" in the federal government survey.

So what are some of the benefits of working in such an environment, and what advice could you give to a person who might be considering a career in, say, the public sector or even possibly interested in joining OMB?

Mr. Johnson: I think the reason why the 500-or-so employees at OMB are so pleased to be there is that it is the center of the government universe. Everything that moves in the federal government involves OMB. It involves money or it involves how money is spent.

And so if you want to be where the action is, OMB is it.

The standards of the employees we hire across the government are high, so I don't know that we hire dramatically more talented employees or our standards are higher. Our standards are high, but so are the Labor Department's and so are the Interior Department's. But we throw our employees into the middle of things very quickly. They understand that their work is very, very important, and they are part of getting things done. Sometimes their recommendations are accepted. Sometimes they're not.

But when an item comes into OMB, it's a proposal. It's a new program that someone wants to put in place yesterday. It's not something that they're thinking about doing in 2012. There's a lot of urgency to address the requests for money, or there's a lot of urgency to develop a budget or there's a lot of urgency to figure out the best way to structure a program to cause the money to be spent most responsibly. There's a very short time frame for everything that goes on in OMB, and then a decision gets made or it's not. And the Congress approves it or it's not in a matter of months.

So you can see the benefit of the results of your actions very, very quickly, and you know that you've participated in causing a new program to get launched or an old one to get reconstituted, or some things to be combined or monies to be spent more in this area and less in that area.

There's a great esprit de corps there. Some people stay a long time. Some people go from there to other parts of the federal government with great training, and we welcome people who want to stay there for their whole career, and we welcome people that want to spend a few years there and then go on.

It's just a great, great place. There's great pride of accomplishment and effort. That's also one of the benefits from being small in size -- 500 people. Everybody can be very plugged into what's going there and kept very knowledgeable, and they can hear from their senior management how much they're respected and loved by the management and regarded by all the federal government.

Mr. Morales: Well, that's just fantastic. Unfortunately, Clay, that will have to be our last question.

I do want to thank you for fitting us into your busy schedule. But more importantly, John and I would like to thank you for your dedicated service to our country in leading the President's Management Agenda.

Mr. Johnson: Thanks. Honored to be here. These are great questions. I like talking about what we're doing, because most people think about government work as focusing on what the policy ought to be, and the key is how a policy is implemented, which gets into how money is spent and how an agency is managed. I think it's really, really important.

I encourage your listeners to take advantage of our two websites, Pay attention to how your programs, if you're a federal employee, are considered to work, how comparable programs are working or not, learn from it. There's a lot of information there that can drive behaviors within the federal government and drive what kind of sentiments are expressed to your elected members of Congress, for instance, about desires to cause -- help get involved in making programs work better.

And, I encourage federal employees to send in examples of things that they think are keys to success, obstacles that they wish to be removed, obstacles to success, and also send us examples, large and small -- feeder mice or FAA -- examples of programs that they're proud of that have been cause to be more effective.

Mr. Morales: This has been The Business of Government Hour, featuring a conversation with Clay Johnson, Deputy Director for Management at the Office of Management and Budget.

My co-host for this morning's program has been John Nyland, managing partner for IBM's Global Business Services in the Public Sector.

As you enjoy the rest of your day, please take time to remember the men and women of our armed and civil services abroad who can't hear this morning's show on we're improving their government, but who deserve our unconditional respect and support.

For The Business of Government Hour, I'm Albert Morales. Thank you for listening.

This has been The Business of Government Hour.

Be sure to join us every Saturday at 9:00 a.m., and visit us on the web at There, you can learn more about our programs and get a transcript of today's conversation.

Until next week, it's

A Model for Increasing Innovation Adoption Lessons Learned from the IRS e-file Program

Thursday, April 12th, 2007 - 16:20
Posted by: 
Transparency is one of the current buzzwords, which is notnecessarily bad. A keystone of democracy is accountabilityand transparency, i.e., providing information is one way forthe government to be accountable. Since no one wants tolook bad, transparency can be a major impetus for programimprovement.

Forum Introduction: Toward Greater Collaboration in Government

Thursday, April 12th, 2007 - 15:43
Posted by: 

Leading the U.S. Coast Guard

Thursday, April 12th, 2007 - 15:31
Posted by: 
Profiles in LeadershipAdmiral Thad W. Allen Commandant, United States Coast Guard

Robert Shea interview

Friday, March 23rd, 2007 - 20:00
"My job is to make performance an increasingly important factor, and the PART is a very powerful tool. There's a tremendous opportunity to make greater use of this on the Hill."
Radio show date: 
Sat, 03/24/2007
Intro text: 
Managing for Performance and Results; Leadership; Collaboration: Networks and Partnerships; Strategic Thinking; Innovation...
Managing for Performance and Results; Leadership; Collaboration: Networks and Partnerships; Strategic Thinking; Innovation
Complete transcript: 

Originally Broadcast Saturday, December 9, 2006

Washington, D.C.

Mr. Breul: Good morning, and welcome to The Business of Government Hour. I'm Jonathan Breul, your host, and senior fellow of The IBM Center for The Business of Government. We created the Center in 1998 to encourage discussion and research into new approaches to improving government effectiveness. You can find out more about the Center by visiting us on the web at

The Business of Government Radio Hour features a conversation about management with a government executive who is changing the way government does business. Our special guest this morning is Robert Shea, Associate Director for Management at the U.S. Office of Management and Budget.

Good morning, Robert.

Mr. Shea: Good morning, Jonathan.

Mr. Breul: And joining us in our conversation is John Kamensky, senior fellow at The IBM Center for The Business of Government.

Good morning, John.

Mr. Kamensky: Hi. How're you doing, Jonathan?

Mr. Breul: Let's begin by talking about the Office of Management and Budget. Robert, could you tell us about OMB, what is its mission, how is it organized, and give us a sense of the size of the staff?

Mr. Shea: OMB is a great storied institution, part of the Executive Office of the President. It's got about 500 employees. Its primary responsibility is to serve the President in executing his budget responsibilities, his oversight of the Executive Branch and the implementation of programs, and ensuring that regulations are issued in compliance with the law in an effective and efficient way.

It has the most talented group of employees in the federal government. It was rated recently by its own employees as the best place in government to work. It's a great place to be, very exciting. You have a very high sense of purpose at OMB, because you are every day trying to figure out how to serve the American people better every day.

Mr. Breul: Now that you've given us some sense of the larger OMB organization, could you elaborate on the management side of OMB, its specific purpose, its role within the larger organization?

Mr. Shea: Sure. The two big sides of OMB are the budget side and the management side. Most of the employees work on the budget side; that is, they prepare the budget, work with agencies to enact and implement that budget. But they also oversee the management of agencies. And the management side helps them to do that better.

We have an Office of Federal Procurement Policy, an Office of Federal Financial Management, an Office of Information Technology and E-Gov, and an Office of Personnel and Performance Management. Those all fall under the Deputy Director for Management, Clay Johnson, and are headed by folks who implement laws that have been enacted over time to improve government management, including the Office of Federal Procurement Act, the Chief Financial Officers Act, the E-Gov Act, the Clinger-Cohen Act.

All of these are intended -- and of course the Government Performance and Results Act, which really is the foundation for all of the management improvement acts that have been passed over time -- all of them are designed to make programs work better, more efficiently, and effectively on behalf of the American people. And we have chosen to implement those statutes, and measure implementation of those statutes, with the President's Management Agenda scorecard.

So for each of those offices, there is also an initiative on improving financial performance, strategic management of human capital, expanded electronic government, competitive sourcing and budget and performance integration, all of which have clear definitions of success criteria which we use to judge agency performance every quarter, so that we are improving the timeliness and accuracy of financial information that agencies can use to manage, that agencies have the employees they need to accomplish their missions, that they're reducing duplicative IT systems, managing IT projects more effectively and securely, that they're setting clear outcome goals for their programs and working to achieve them better and more efficiently every year, and reducing the cost of commercial activities.

So we've got about 60 people, all of whom are working diligently with their counterparts on the budget side of OMB and individuals and agencies to improve agency and program performance.

Mr. Kamensky: Well, that's a broad scope of responsibilities that the management side has. What are your specific responsibilities as the Associate Director for Management in OMB?

Mr. Shea: I often say that my duties are as assigned. But I lead the -- my primary responsibility is leading the budget and performance integration initiative, which implements the spirit of the Government Performance and Results Act.

Agencies have to have clear outcome-oriented long-term goals and measure their progress achieving those goals on an annual basis, and reporting on how well they're doing and identify strategies to do better, to do more for less. So I work with agencies to achieve the specific criteria for that initiative, and we measure and report our status in that initiative through the scorecard.

But I also -- because I've got some experience working on Capitol Hill -- help my colleagues work with the Congress in reporting on the extent to which we we're complying with the various management statutes in place. I also advise on various policy matters, particularly in Executive Branch organization and personnel policy.

Mr. Kamensky: You also chair two councils -- you just mentioned one of them -- the Council on Budget and Performance Integration. The other one is this Credit Council. What are these two councils, what is the role, and how do they tie back into this President's Management Agenda?

Mr. Shea: I'd like to say there is no activity in which the government is engaged where there aren't multiple players trying to achieve the same objective, and those are two examples. Every agency is trying to do a better job of setting clear goals and reporting on the extent to which they are achieving them, and trying to do the more efficiently.

Likewise, we have a massive number of loans and loan guarantees that we issue every year. Multiple agencies are doing that. We get each of these groups together to come up with and share best practices on how to achieve those objectives. We've got a meeting with the budget and performance integration leads. And two of the things we'll talk about are making sure that agency congressional budget justifications integrate performance information in a way that is both useful to them and useful to their primary audience on the Hill, the appropriators, but we'll also come up with ways to reduce duplicative reporting requirements.

Everybody wants agencies to report on how they're doing, how efficiently they're performing. I mean, sometimes we get carried away. So we want to make sure we are not creating duplicative reporting requirements that detract from an agency's ability to focus on what they should be doing, which is actual program performance.

Now, the Credit Council is made up of representatives from the major lending agencies: SBA, the Department of Agriculture, the Department of Education, Housing and Urban Development, the Veterans Affairs Department. These are folks who manage massive loan portfolios. And we want to make sure that they are working together to find the best way to assess the creditworthiness of individuals and manage their loan portfolios so that the risk to the taxpayer is not too great, while at the same time, we are reaching our target borrower population, that the program goals of these loan portfolios are achieved in the most efficient way possible.

Mr. Breul: Let's step aside for a moment and look at your career. How did you begin your career and how did you get to OMB? What was the path that took you to where you are now?

Mr. Shea: I started with the House of Representatives Committee on Government Reform and became passionate about improving agency and program performance there. I then spent a couple of years working for my good friend, Congressman Pete Sessions of Dallas, as his legislative director, and got some good experience advising a senior political leader on a broad array of public policy. But this fellow had an intense interest in improving government results. So it was a good match.

I then had the privilege of working for Senator Fred Thompson as Chairman of the Senate Governmental Affairs Committee, another dynamic leader committed to improving government management and program performance.

As a staffer on that committee, I got the privilege of working with agency officials, Executive Branch officials, particularly those from OMB in their Senate confirmation process. That's where I met Mark Everson, then-comptroller at OMB, now IRS Commissioner. And he asked me to come work for him at OMB.

He was then promoted to Deputy for Management, left OMB and was replaced by Clay Johnson. And Clay asked me to stay on, lead the Budget and Performance Integration Initiative and help him administer the President's Management Agenda as Associate Director for Management. I've worked with three directors of OMB, two deputy directors for management, a senator and two congressmen, and all of them committed to -- not only public service, but service that contributes to the improved performance and service to Americans. So I am proud to be associated with people who I know the American people would be glad to know are working on their behalf.

Mr. Breul: How has OMB's Program Assessment Rating Tool changed the way government does business?

We will ask Robert Shea, Associate Director for Management at OMB, to tell us about this, when the conversation about management continues on The Business of Government Hour.


Mr. Breul: Welcome back to The Business of Government Hour. I'm you host, Jonathan Breul, and this morning's conversation is with Robert Shea, Associate Director for Management at OMB.

Also joining us in our conversation is John Kamensky, senior fellow at The IBM Center for The Business of Government.

In 2003, OMB initiated its Program Assessment Rating Tool, commonly referred to as PART. Robert, would you tell us about PART: its purpose, its scope, how is it designed, and what's the overall status of the PART initiative today?

Mr. Shea: The Program Assessment Rating Tool is a simple device to guide agencies in OMB in assessing the management and performance of programs. It's comprised of 25 or so basic questions: asking whether a program's purpose is clear and it's well-designed to achieve its objectives, whether it's got outcome-oriented long-term and annual goals and aggressive targets, whether it's well-managed. Most importantly, the tool asks whether a program achieves its goals.

We've asked these questions of virtually every program in the government now. We've assessed 100 percent of government spending, give or take 5 or 8 percent. And the purpose is to ascertain what barriers exist to improving a program's performance, and once we identify those barriers, come up with strategies to overcome them. The way it works is agencies tell us what the right answers to these questions are, like any self-assessment that's going to appear more generous than it should be.

So we at OMB kind of look at the evidence that has been provided and try to work with the agency to come up with the right answers to these questions, and then come up with a reasonable, accurate, and objective overall assessment for a program. Once OMB and the agency staff arrive at the right answer, my staff does an audit of all the parts to make sure that they are consistent with the rules, whether we've applied the questions consistently to programs across the government. After that, if an agency didn't like its overall assessment, it can appeal to a high-level committee comprised of deputies from various agencies in the government.

And then we arrive at a final rating. We use that not only to identify strategies to improve programs, but to make decisions about programs, about whether we need to propose legislative fixes to make them perform better, what their budget level ought to be, is this program performing at a high enough level where we can invest more, or do we need to fix something before we scale it up.

Hopefully, we can make more and more of those decisions. But for the first time, we've had this uniform set of assessments to make decisions like this across government, so we can see the performance of programs within agencies, but also perhaps more importantly, like programs across government -- programs with similar goals.

Mr. Breul: How has the PART introduced a new level of transparency and led to a more citizen-centric government?

Mr. Shea: As long as we've been doing the Program Assessment Rating Tool, we have published all of the answers and the evidence upon which those answers are based on the Internet at OMB's website. But it was so difficult to navigate that you might as well not have been posting it at all.

Analysts might have been able to look at the data and made some use of it; people familiar with a specific program might have found it useful. But otherwise, it wasn't very accessible. So we stepped back and launched a website called to sort of summarize all of the program assessments in a language that was more easily understandable by the average reader or visitor to the site, and made it searchable by a common search tool.

But all the evidence is there. We haven't reduced the amount of information that's there. We've just summarized it in a way that's more accessible, readable, understandable so that people can make greater use of it.

We've had more than a couple of million visitors to the site, which is more modest than I would like it to be, but is a lot more than visited in the past. And I hope that that information could be much more usable in the future; that people will visit the site as a way to look at how other programs are finding out how to do better and better every year.

But also, the whole program is accountable. You know, ultimately we ought to be candid about whether or not we are achieving our objectives on behalf of the American people and trying to collaborate on ways to do better in the future.

I will tell you one of the most visited sites on is the Gallaudet University PART. We are the federal investment in Gallaudet University. Taxpayers invest $100 million a year in Gallaudet. So we thought it was a useful program to assess, and when you look at the data, it shows that graduates in jobs or degree programs commensurate with their degrees from Gallaudet reduced by a dramatic amount -- and the PART makes you ask why, what's causing that? And there has been a lot of discussion between us and Gallaudet. Gallaudet is an important storied institution that is serving a pivotal role, educating deaf people, both from K through 12 all the way through the postgraduate level, doing very important research on deaf education.

But the PART highlighted what really was invisible to most, and that was a decrease in some of their performance. And so hopefully, we will come up with ways to improve. That's the most high-profile assessment we've done, but all of these programs provide an opportunity to identify weaknesses and strategies to overcome them.

Mr. Kamensky: Well, in the first year, I have noticed that it was treated largely as a compliance exercise, and the next year, it seemed to be that a lot more senior executives were paying attention to the process. How does this PART score wind up influencing an agency's budget, either in the President's budget or up on the Hill in the appropriations process? And are you trying to generate more interest up on the Hill on this?

Mr. Shea: Well, starting with your first point about the compliance exercise, PART is what you make it. The Program Assessment Rating Tool can be a very effective way to drive greater performance in your organization, because it's really basic questions about a program's performance and management that we all ought to be asking whether or not we are achieving.

As far as the use of this as a device to make budget decisions, we ought to be making decisions based on performance and management of programs. This just gives us a uniform way to produce that evidence and use it as a factor in decision-making. But you know, John, that we don't make these decisions based on one factor alone, there are a lot of drivers to decisions about program budgets.

My job is to make performance an increasingly important factor, and the PART is a very powerful tool. But decisions will be made to increase funding or decrease funding for a program that are not related to performance. A program may have outlived its usefulness. The original purpose might have gone away, or the program may not be a priority for a particular administration or committee chairman.

So a lot of factors go into the decision-making about program funding. A program that is rated ineffective may need additional funds to address a particular weakness. And a higher performing program may, as I say, have outlived its usefulness or not be a high priority, and therefore its funding can be diverted to other uses. And if you look at the PART ratings, there is a slight correlation: higher performing programs tend to in the aggregate get higher budgets, and programs in the lower rated category tend to get less funding. But there is no direct correlation between a program's rating and its funding level.

There's a tremendous opportunity to make greater use of this on the Hill. Some resist it -- I fail to understand why except that I think some may view criticism of a program that they created as a personal slight. And I can't say enough or clearly enough or repeat enough that this is intended to be a characterization of the status quo about a program's performance and management, and we want these programs to work as much as anyone else. And the path forward is to address whatever weaknesses we find, not ignore them.

Mr. Breul: Last year, in 2005, the PART won the prestigious Innovations in American Government Award. Could you tell our listeners a little bit about the award and what the significance is of receiving it?

Mr. Shea: The Ash Institute, in collaboration with the Kennedy School of Government and the Council for Excellence in Government, every year receive nominations for innovations in American government, things that they think ought to be replicated because of the promise of the particular innovation to improving the lives of Americans for the performance and management of government.

And in 2005, they recognized the Program Assessment Rating Tool as one of those innovations worthy of replication. It was a high honor to have received that award. It was not received by me. It was -- rightly went to the folks at OMB who developed the tool. It was an important recognition that I think validated for all of us who have been toiling at this the methodology we're using to assess program performance and management. The program comes with a $100,000 grant, which because we are OMB, we couldn't receive, we had to take the award alone as compensation.

Mr. Breul: What is, and how does the PART facilitate budget performance integration?

We will ask Robert Shea, Associate Director for Management at OMB, to share with us the answers to these questions when we return and continue our conversation about management on The Business of Government Hour.


Mr. Breul: Welcome back to The Business of Government Hour. I'm your host, Jonathan Breul. This morning's conversation is with Robert Shea, Associate Director for Management at the Office of Management and Budget.

Also joining us in our conversation is John Kamensky, senior fellow at The IBM Center for The Business of Government.

Robert, during our last segment, you mentioned a new website, What are the plans to expand the application of, and what are your plans to use it in the future to share information on programs, and specifically to assist Congress during the reauthorization of programs?

Mr. Shea: Well, now includes all the programs that have been assessed to date. The remaining programs we've assessed will be posted there early next year. So you'll have the most comprehensive information on the performance and management of federal programs anywhere. It's an incredibly comprehensive site, useful information if you want to fix a program, if you want to identify what other programs are doing particularly innovative things to improve their performance, the relative performance of like programs.

We can do a lot more of that. We can identify or make it easier to find similar programs so that a poorer-performing program can go to one of its partner programs or a program with a similar missions to find out better ways to crack the nut. I think it can be a particularly useful source of best practices for programs across the government.

As far as congressional authorization is concerned, I am trying to figure out a way to link a program's statutory authorization on the site so that folks who are involved in the reauthorization program of a program either at the agency or in the Congress, or anywhere for that matter, can go not only for the statutory basis for the program, but also to find out when its authorization might be up and when the right time might be to interject some reforms into the reauthorization process.

We're not there yet. I hope it will be part of the site when it's refreshed in the early next year, but certainly in the near future, it's something that that site ought to provide, I encourage everybody to visit now and often.

Mr. Breul: How has the PART submission process evolved? Originally, it was a paper exercise. Now, you use a PART web application, it's web-based. What are the future plans to further enhance the PART web application?

Mr. Shea: We used to submit PART answers over the Internet on an Excel spreadsheet and then have to convert that so that we could publish it online. Now, we have evolved to an online collaboration tool that allows agencies to input their answers and evidence more easily, and then for OMB and agencies to collaborate on what the right answers are to those questions online.

It's much quicker, much more collaborative, but even that can be better. For instance, right now, you really can't see what the specific edits are that somebody made to the data in the application. And we want to make sure that people can have an easy way to track what's going on with their program assessment. And we also want agencies to be able to more easily access data about other ongoing assessments so that if they are having a particular challenge, whether it's the right performance measures or efficiency improvement strategies or reform efforts, we want them to access that information more readily. PART web is a tool that's in its future evolution can facilitate that to a much greater degree.

Mr. Kamensky: I see some really big differences between departments in the program assessment ratings under the PART process. Is this because of the inherent nature of the programs these departments have, or is it related to something else?

Mr. Shea: The differences in the application of the tool are probably as varied as the difference in departments themselves. A large department can have pockets that embrace the tool and really use it to aggressively drive performance improvements or reform strategies when the rest of the department might not do quite as much as you would hope to use the tool. And so we try to be as uniform in the application of the tool as possible through the process I described of auditing PART results and giving agencies an opportunity to appeal to a high-level board that's overseeing the whole process so that it's consistently applied throughout the government.

Each of these program's assessments, like programs themselves, can be better. And we ought to be as critical as we can about the status of a program so that we can drive it to improve even more. And everybody who looks at a PART ought to be highly critical of the assessment. They ought to question the answers to the questions on the PART, don't give us the benefit of the doubt, because the more and more people who provide their input into this process, the more accurate and reliable and useful it will be.

Mr. Kamensky: One of the key initiatives in the President's Management Agenda is the Budget Performance Integration Initiative. Could you tell us a little bit more about this initiative and how PART plays a role in helping that particular initiative be successful?

Mr. Shea: The Budget and Performance Integration Initiative is one of the five initiatives on the President's Management Agenda which each major agency is complying with. It ensures that agencies have a strategic plan that's got really good long-term outcome-oriented goals, that it uses data on a regular basis to make decisions about how to improve program performance and efficiency, that individuals in the organization are assessed based on their contribution to the achievement of the agency's and program's mission and goals.

The Program Assessment Rating Tool gives you a really good way to assess the performance and management at the program level and then to use that improvement strategies that you've identified through that tool to improve strategic goals, individual performance goals, and efficiency efforts. We just want to see the PART as another source of information agencies can use to improve their performance.

Mr. Breul: With all the success that you have had with PART, could you tell us whether its success has piqued the interests of other countries? Have other countries come to you and sought to emulate or imitate the PART tool?

Mr. Shea: Yes. In fact, I was surprised several years ago to learn that the Scottish EPA had applied the PART. I am less surprised with the successive governments that come to me asking for information on how they can apply this tool to their affairs. I was recently at a meeting of OECD in Paris, in which my partner representatives were all very eager to learn about this tool. Australia, Canada, Korea, Thailand, all have expressed an interest in applying this precise tool.

I had a visit, far less exotic, from a local government near us right now that wanted to consult with us on how they could apply this tool to their affairs. It's really simple. A set of questions that asks of federal programs, what could legitimately be asked of any activity. Do you have clear goals, and is your program well-designed to achieve those goals? Do you have long-term and short-term targets? Are you well-managed? And are you achieving your goals? Those are basic questions that we ought to be asking about what we're doing so that we can do it better.

Mr. Breul: Are you finding similar interests by state and local governments? Has anyone from a governor's office or a mayor's office come to visit, sought to pick up the essential elements of the PART?

Mr. Shea: I have had some modest interest -- not a lot -- but like I say, one of the local governments from the Washington, D.C. metropolitan area approached me about applying the tool there. So I think that would be very exciting.

Mr. Breul: And what about interest from Congress? Have you had any particular entrees or invitations from them to follow-up and dig more deeply into or how the PART tool itself operates?

Mr. Shea: There is increasing interest from the Congress in the Program Assessment Rating Tool and our conclusions about programs. Some of that interest is good; some of it is not so good. I'd like to hope that more and more in Congress find this information useful in performing their jobs in reauthorization, oversight, appropriations, because like us, they want the programs that they authorize and fund to work better every year.

And you see increasing citations to assessments of programs in congressional reports and the like -- hearings. So I hope that grows. And I hope it grows in a positive way that people really find this information more and more useful.

Mr. Breul: What's next for PART and for other government management reforms,? We will ask Robert Shea, Associate Director for Management at OMB, to share this with us when our conversation about management continues on The Business of Government Hour.


Mr. Breul: Welcome back to The Business of Government Hour. I'm your host, Jonathan Breul, and this morning's conversation is with Robert Shea, Associate Director for Management at OMB.

Also joining us in our conversation is John Kamensky, senior fellow at The IBM Center for The Business of Government.

Robert, with the forthcoming Fiscal Year 2008 budget, which is going to be released in February of 2007, the Administration is going to release the results of the fifth round of the PART assessments, completing 100 percent of programs and dollars. What are the plans for PART next year, and does OMB plan to go back and re-PART specific programs? Are you going to go look at programs that got low scores, or are you going to take a look at programs in various cross-cutting areas?

Mr. Shea: I hope we're going to do all of those things, having assessed virtually 100 percent of the federal budget, have improvement plans for most programs. Everybody has identified steps that they are going to take to improve the programs they manage. So we need to track those; we need to ensure that people are being as aggressive as they can in implementing those improvement plans. So that's the first thing we'll do, make sure everybody is doing what they said they would do to improve their programs.

Programs that have done enough to warrant a reassessment will get reassessed, and hopefully their ratings will improve. But then we'll have to identify improvements that the programs will have to take again to improve even more. So this is a continuing cycle of improvement that we can engage in now with the PART.

Now, as you say, having assessed 100 percent of the programs, what is the opportunity for looking at cross-cutting areas? I think the highest value use of the Program Assessment Rating Tool is in getting like programs together, programs with similar missions, and collaborate on better ways to jointly improve their performance. We've done this in a myriad of areas. In grant programs, for instance, we've come up with a common strategy that programs can use to share information about specific funded activities that are more effective than others so that we can scale those up.

We have collaborated this past year with programs aimed at improving achievement in math and science among America's youth. And you will find a real lack of clarity about the goals of those programs. We've fixed that. And now we are going to get more and more evidence about which math and science programs are most effective so that we can share those lessons with the hundreds of other programs that are aimed at improving math and science achievement. That's the real potential for the future of the PART. I intend to drive its use for collaboration among like programs.

Mr. Breul: The President recently signed into law a new piece of legislation, the Federal Funding Accountability and Transparency Act. What does this legislation envision? And can you tell us something about the role of the blogger community in the passage of this new act?

Mr. Shea: That was something to behold. This was a piece of legislation which had a very noble purpose but which I didn't give very high odds of passage, because I knew the opposition among many in Congress was great. What it does is it requires us to post on a regularly updated basis those federal expenditures and grants and contracts and loans, et cetera, to organizations other than to individuals, and to post that in a searchable, easily accessible format on the Internet. And we are going to implement that Act as the authors of that Act intend it to be created. We will collaborate with them in the development and planning of that website.

Now, one of the forces that helped this bill get enacted was the blogger community on the Internet. They were passionate, both on the left and the right, for this legislation, because they saw it as a way to improve accountability of government for taxpayer spending. And they got wind of efforts to defeat it and shined the bright light of the Internet on those activities and overcame them -- by sheer force, got very powerful members of Congress to relent and in the end support passage and enactment of this legislation.

Mr. Kamensky: This has been, you know, a fascinating phenomenon, that this has happened. The question then becomes, is there the ability to leverage this kind of change in the culture of Washington and new ways to focus attention on management issues that might otherwise not have been paid attention to?

Mr. Shea: I think one of our watchwords in implementing the President's Management Agenda has been transparency. We grade agencies every quarter, post their grades on the Internet. We also assess programs and post all of the evidence on which those assessments are based in easily accessible websites, searchable and understandable by the American public. The reason we do that is because we think we're on the side of right. We think what we're doing is the best way to achieve our goals. And if others disagree with us, we want to know that. If they have a better way to achieve the goals, we want to know that, because no one wants to achieve our mutual goals more than we do.

So I think the blogger community, just like any other media outlet, is a great way to both communicate and collaborate on our plans to achieve goals. So we have a new vessel for communicating our plans. I anticipate that the feedback we get might be a little more aggressive than we're used to, but bring it on. We want feedback so that people can buy into what we are doing.

Mr. Kamensky: And do you have some plan for leveraging this?

Mr. Shea: Well, I think that's it. I think regularly communicating with the folks who are involved in that website, not only on the implementation of the plans to comply with the Act, but also in the implementation of the President's Management Agenda overall.

Mr. Kamensky: Separately, how significant is the proposed Program Assessment and Results Act, which is a proposal in Congress, to the continued and future success of the government management reform efforts?

Mr. Shea: Well, I think one of the questions the Program Assessment Rating Tool asks is whether a program's statutory design adequately helps it achieve its goal or whether it's flawed in some way. If it's flawed, I generally suggest that we try to remedy that flaw in statute. So there are a number of statutory reforms that have been proposed as a result of the PART highlighting a flaw. We've not been that successful in getting those reforms enacted. So in the future, there's a great opportunity for improvement.

And when you see like programs that suffer from generally the same flaws, you can accelerate the performance of those programs by perhaps reforming them all at the same time. Reauthorization, as we've talked about, is an opportunity to tee up those reforms for agencies and the Congress, and the President as well.

Mr. Breul: Let me turn the conversation back to OMB for a moment. OMB has a reputation for being a very demanding and stressful place to work. And yet to the surprise of many, it achieved the number one ranking in the Partnership for Public Services' best places to work in the federal government survey.

What are some of the benefits of working in such an environment, and in particular, what advice would you give to a person considering a career in the public service or possibly even being interested in joining OMB?

Mr. Shea: OMB is a very demanding place to work, just like any federal job. We are doing a better job at telework. So I'm able to spend more time with my beautiful wife and charming three girls. But it's still tough -- the hours are long, and there is no downturn in the workload throughout the year. There's always something going through OMB. When every policy matter, legislative matter, budget matter, management matter, regulatory matter comes through OMB, there's just no let-up in the workload. But that's also why it's an attractive place to work.

But the work we are doing will have an impact on the performance and management of the federal government, and therefore, the lives of the American people. You can have a real impact on mission at any job at OMB. And that is an incredible reward. There is a challenge of staying the best place to work, because while our employees are the most talented, there's a limit. You've got to have a reasonable workload-family balance. And so that's a continuing challenge that we have to confront.

But the advice I'd give to people who are considering a job at OMB is to come. If you're talented and have an interest in public service, serving the American people, OMB is the most exciting place to be because it's where I think you can have the greatest impact.

I would recommend you visit for more information about not only OMB in general, but opportunities to come work there.

Mr. Breul: Robert, that's great advice. We've reached the end of our time, and that will have to be the last question. I want to thank you for fitting this into your very busy schedule today. And more importantly, John and I would like to thank you for your dedicated service to the public.

Mr. Shea: Thank you very much, Jonathan, John. This has been fun. And for those listening, if you want to get more information about the President's Management Agenda, I invite you to visit, where we update regularly the status of the scorecard and other President's Management Agenda initiatives.

And not to sound like a broken record, but for more information about program performance and management and our assessments in general, visit

Mr. Breul: This has been The Business of Government Hour, featuring a conversation with Robert Shea, Associate Director for Management at the Office of Management and Budget.

Be sure to visit us on the web at There, you can learn more about our programs and get a transcript of today's fascinating conversation. Once again, that's

As you enjoy the rest of your day, please take time to remember the men and women of our armed forces and civil service abroad who can't hear this morning's show on how we are improving their government but who deserve our unconditional respect and support.

For The Business of Government Hour, I'm Jonathan Breul. Thank you for listening.

Michael Ryan interview

Friday, January 5th, 2007 - 20:00
"MCC provides assistance in a manner that promotes economic growth and the alleviation of extreme poverty and strengthens good governance, economic freedom, and of course, investments in people."
Radio show date: 
Sat, 01/06/2007
Intro text: 
Financial Management; Managing for Performance and Results; Missions and Program ...
Financial Management; Managing for Performance and Results; Missions and Program
Complete transcript: 

Originally Broadcast Saturday, January 6, 2007

Arlington, Virginia

Mr. Morales: Good morning and welcome to The Business of Government Hour. I'm Albert Morales, your host, and managing partner of The IBM Center for The Business of Government. We created this center in 1998, to encourage discussion and research into new approaches to improving government effectiveness. You can find out more about the center by visiting us on the web at

The Business of Government Radio Hour features a conversation about management with a government executive who is changing the way government does business. Our special guest this morning is Michael Ryan, vice president of the Administration and Finance with the Millennium Challenge Corporation.

Good morning, Michael.

Mr. Ryan: Good morning.

Mr. Morales: And joining us in our conversation is Pete Boyer, Director in IBM's federal consulting practice. Good morning, Pete.

Mr. Boyer: Good morning, Al.

Mr. Morales: Mike, perhaps you could start by giving us an overview of the Millennium Challenge Corporation. Tell us a little bit about the mission and give us an overview of the Millennium Challenge Act of 2003, and some of its key requirements.

Mr. Ryan: That would be my great pleasure.

The MCC mission is simply to reduce poverty by supporting sustainable economic growth in developing countries -- in those countries which create and maintain sound policy environments.

The Millennium Challenge Act established MCC to administer the Millennium Challenge account. This was established in January of 2004 as a result of President Bush's commitment at the Monterey summit. And that summit focused on financing for development, and the purpose, as stated, was to provide greater resources for developing countries, taking greater responsibility for their own development. It sometimes been referred to as assistance with accountability.

The act itself mandates that MCC provide assistance in a manner that promotes economic growth and the alleviation of extreme poverty and strengthens good governance, economic freedom, and of course, investments in people.

The MCC program, of course, is only one component of our overall foreign assistance strategy, but it is an important and an innovative one. It's something new, and our work draws on lessons learned from international development organizations over the past 50 years, and it focuses on the long-term mission of reducing poverty, as I mentioned, through economic growth.

In short, we work in partnership with some of the poorest countries to create country ownership instead of long-term dependence on assistance. We want to give assistance in order for countries to take over the job of their economic growth and alleviate poverty within their borders.

Mr. Morales: Mike, this is certainly a non-trivial challenge in mission. Could you tell us a little bit about how your organization is organized, the size of your budget, and how many people are employed in your organization?

Mr. Ryan: MCC was designed as a small and a federal corporation and is meant to ensure accountability for the aid we administer. As a federal corporation, it's managed by a chief executive officer, who's currently Ambassador John Danilovich, and he's appointed by the president and confirmed by the U.S. Senate.

What makes us a little bit different is we're overseen by a board of directors, who make the major decisions, what countries to give assistance to and the like. And that board of directors is chaired by the secretary of state. The vice chair is a secretary of the treasury. Other members include the -- the United States trade representative. The U.S. aid administrator. And it is has interestingly two public members currently, although, there may be more in the future.

Kenneth Hackett, who's the president of Catholic Relief Services, and Governor Christine Todd Whitman, who in addition to being the governor of New Jersey, was also a former EPA administrator and now is a president of the Whitman Strategy Group.

We have a number of departments. We have operations, we have a department of accountability, a department of policy and international relations. Of course, we have congressional public affairs and an office of the general counsel. And then we have the department that -- that I head up, administration and finance.

As far as our budget goes, the commitment had been to rise to $5 billion a year. The current request is for $3 billion. The House passed a bill, and now is at $2 billion. I don't know where that's going to end up. And clearly, one thing that gives us a good deal of flexibility is that all of our MCC funds are no-year funds, which means that we can obligate funds for a five-year compact at the beginning of the five years, and it's available until it's expended on that -- that compact. It saves us from year-to-year ups and downs and countries can rely on this -- this assistance.

As far as the -- the level of staff, as I said, we're small and we're -- we aim to be small. We want to arise to a staff of -- of 300 in Washington, D.C. Currently, we have 20 people stationed overseas that are above that 300 number, and that number overseas should rise as we established additional contacts in other countries. At the present time, we have approximately 280 people in Washington.

Mr. Morales: So, almost 300 people managing $3 billion in assets?

Mr. Ryan: That's right.

Mr. Boyer: Now, Mike, what are your specific responsibilities and duties as a vice president of administration and finance, and could you tell us about the areas under your purview?

Mr. Ryan: Sure, Pete. I -- I'm essentially a chief financial officer in the federal mold. I'm responsible for the same areas that many CFOs are responsible for, financial management and reporting, financial services, budget formulation execution, development of annual performance plans, oversight of financial systems, and producing the annual performance and accountability report and procurement.

I also have oversight of HR, Human Resources, recruiting in development. Facilities management, both in Washington and overseas. IT and personnel security. So, it's just a full range of administrative and financial duties that you'd expect to see in an organization with my title.

Mr. Boyer: Now, Mike, you clearly had a very interesting career. Could you describe your career path for our listeners? Specifically, how did you begin your career?

Mr. Ryan: Well, I should start off by saying that I -- I had been a civil servant until my current appointment with MCC for many, many years, but my first position actually was a mathematics teacher in Baltimore City schools. After I earned an undergraduate degree at St. John's College in Annapolis. But I left teaching math and went to -- to Harvard where I got a -- a PhD in near eastern languages and civilizations. I got that degree in 1981, after having joined the federal government in 1979.

During my studies on -- on that degree, I spent three years researching Egypt and traveling around the Middle East under a Fulbright at Smithsonian and the Center for Arabic Study Abroad fellowships.

I've had several positions in the Department of Defense and Department of State. And when I first joined in 1979, as I mentioned previously, I was a Middle East analyst for the Department of Defense. I've also had senior-level positions, including deputy director of a plans directorate under the Defense Security Assistance Agency. I've been the acting deputy assistant secretary for International Narcotics in Law Enforcement Affairs in the Department of State. I was also the executive director and comptroller of that same bureau in the Department of State.

I also worked at EPA, where I first met Governor Whitman, and I mentioned before, when she was the administrator. And I first started as a comptroller there in 1997, with responsibility for budget formulation and execution. As all -- as well as all aspects of financial management in operations.

I became the deputy CFO of EPA then in 2000, and I had that job until 2006. May, actually, when in joined MCC. At EPA, I also managed their strategic planning, budgeting, financial management, performance measurement analysis, and their accountability functions.

Mr. Boyer: Mike, that's a very broad set of experiences. I'm curious, how have these experiences prepared you for your current leadership role at MCC, and have formed your management approach and leadership style?

Mr. Ryan: I guess being deputy CFO at EPA and acting CFO during periods when EPA did not have a Senate-confirmed CFO in place was the best preparation for my technical duties at MCC. Having a practical experience in managing a CFO shop, including problem-solving in all areas normally reporting to a CFO, and also extremely useful contacts within the CFO counsel, helpful opportunities to share experiences across the federal CFO community.

Previously, I think overseas experiences in the Department of -- of State and Defense, where I was based in Washington, but did extensive travel, in addition to my -- my work, as I -- I -- on my degree that I -- I referred to previously, helped me understand other country's governments and -- and cultures, and how you deal with countries in their own terms and -- and not necessarily bring your own cultural assumptions to play.

So, it was a useful body of knowledge overseas and -- and in the CFO environment because I had to deal with a wide variety of people and -- and people who approached tasks from different angles, and it's tremendously useful in the federal workplace, which is, as you know, wonderfully diverse.

Another useful leadership lesson from defense was that you really have to build a team from the people that you inherit, and then you get to the task of recruiting others. And everybody brings skills to the task. It's a leader's responsibility really to find the best way to use each team member's skills to support the mission and target your recruiting to fill any areas where skills need reinforcement.

I think it's another example of why it's important to appreciate the diversity of abilities and backgrounds represented in the federal workforce based on all the talents that federal employees bring to work everyday, I think we're well equipped for problem-solving from a variety of perspectives, and we're especially well set up to deal with foreign governments, many of whose children, if you will, came to the United States either recently or in the distant past as immigrants and deal very well with those cultures.

Another lesson learned from my experience in defense, state, and EPA, and especially now at MCC, is the importance of public/private partnerships. The private sector has a depth of talent and knowledge that's always refreshed, and government can make good use of private sector expertise to augment its workforce to accomplish the civic tasks without institutionalizing that expertise when it might not be appropriate. To the next set of tasks that lie ahead. It helps to keep public sector organizations more nimble by allowing us to take on specialized talent as needed, while maintaining a basic core of skills in the career ranks.

For example, when EPA was assigned to a government center of excellence to host financial systems, my staff and I argued successfully for a public-private partnership along private sector centers of excellence to compete for technical services in the IT area and in accounting.

This competition, I understand, here at the beginning of December is still going on at EPA. OPM is -- is now, I understand, going to do something similar, and I think that's a good model for a small lien organization like MCC. That is reaching out to the private sector for help in those areas that the private sector does especially well, and can tailor its support for the needs of the day without institutionalizing that support and fixing it in place.

Mr. Morales: That's fantastic. I can -- I can see now why you are focusing on solving some of the world's greatest challenges. Thank you.

What kinds of innovations are being pursued by the Millennium Challenge Corporation? We will ask Michael Ryan, vice president of Administration and Finance with the Millennium Challenge Corporation to share with us when the conversation about management continues on the Business of Government Hour.


Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and this morning's conversation is with Mike Ryan, vice president of Administration and Finance with the Millennium Challenge Corporation. Also joining us in our conversation is Pete Boyer, director in IBM's federal consulting practice.

Mike, in pursuit of its mission to reduce poverty by supporting economic growth as you described in the first segment, the MCC has identified and defined three key principles to guide the efforts.

Can you elaborate on those guiding principles and what is new about the MCC approach to international development?

Mr. Ryan: Well, thank you. The three principles are first of all, to reward good policy. Countries are selected based on their performance, as shown on objective indicators. Not indicators that -- that MCC develops, but that NGOs of the private sector, someone outside, an objective measurement is done on governing justly, which means investing in their citizens and encouraging economic freedom.

The second thing, in addition to rewarding good policy, is that we operate as partners. Countries are responsible for identify the greatest barriers to their own development, ensuring civil society participation in planning and developing a Millennium Challenge account, or MCA program.

Then, to participate in -- in a MCA program requires a high level commitment from the host government. Now, when I say "MCA," of course, I mean the Millennium Challenge account, which is the appropriate that MCC uses.

Each country enters into a public compact with MCC. That includes a multi-year plan for achieving development objectives and identifies the responsibilities of each partner in achieving those objectives.

The third principle, the first being rewarding good policy, and the second, to operate as partners, is to focus on results. MCA assistance goes to countries that have well-designed programs with clear objectives, benchmarks to measure progress, procedures to ensure a fiscal accountability per the use of the Millennium Challenge account assistance, and a plan for effective monitoring and objective evaluation of results.

Because we focus on rewarding good policy, we are seeing something new, and this is where the innovation comes in. Something new in international development, which our CEO calls the MCC effect.

We are seeing examples of countries making important policy changes on their own in order to qualify for funding for the Millennium Challenge account. This is extremely encouraging because we are seeing positive change even before MCC investment begins. I could give one example of this that happened fairly recently in the last couple of months.

We had one country that had a policy. Actually, it was written into their constitution, that married women couldn't inherit property in their own name. And we determined early on that this would mean that only 50 percent of the population would get any benefit out of the --economic benefit out of -- out of our policies, and we told the government, no, this is just not acceptable. You know, we can't continue our conversations if this stays in place. Although it was a longstanding policy and it was rooted in -- in culture and -- and in -- in prior law, they went ahead and changed that law, and they did that without receiving a nickel from us. And one got the feeling at the end of the day that there was something in just getting the stamp of approval that they had passed the test.

That's one anecdotal account, but a very real one. Two Harvard economists studied the MCC effect in a report released earlier this year, and they concluded that countries are responding to MCC's clear and actionable incentives. This is -- was -- was done in the Kennedy School of Government; it was called "Can Foreign Aid create an Incentive for Good Governance: Evidence of the Millennium Challenge Corporation."

Then there was another one from the manager of the World's Bank's "Doing Business Project," And the quote there I think is a good one, in which they stated that we have seen a number of reforms around the world in both rich and poor countries, but in many of the developing countries, the reform has actually been primarily as a result of the inclusion in the Millennium Challenge account.

Now, I would note that we often see reforms, as I -- as I mentioned before, in anticipation of the funding of the Millennium Challenge account, and not just as a result of projects in those countries.

Mr. Morales: That's a powerful story. Now, you used the word "compact." Can you describe the MCC compact development and implementation process, and what are the criteria methodology for determining eligible countries and establishing these compacts? And can you tell us a little bit about the composition of the projects that make up the portfolio?

Mr. Ryan: Surely. I think around the compact development, you get a lot of the innovation that -- that you asked me about before. I mean, what is different? Well, for example, for the fiscal year 2007, the candidative countries, you know, were identified on the basis of a per-capita income, and they must be in the low-income, preferably, for a lower/middle-income categories established by the World Bank. By law, only 25 percent of our funding may be used for lower/middle-income countries, assuring that most of our support goes to the poorest nations in the world. And I might add that we make every effort that if a lower/middle-income country makes a -- a proposal for a compact, and it is for some of the poorest people in their country, we find that to be a very compelling argument for going to that lower/middle-income country.

We report to Congress on our selection methodology, and our board of directors that I mentioned before, base a selection on specific performance indicators developed by independent, third-party institutions. We also seek public comment on selection methodology.

Right now, we're using 16 indicators in three broad categories, and countries must score above the median to be eligible. These indicators come from organizations including the World Bank, the World Health Organization, Freedom House, and UNESCO. And again, the indicators are -- are in the three areas that I mentioned before, ruling justly, investing in people, and -- and I think I mentioned economic freedom.

And by "economic freedom," we -- we mean things like the costs of starting a business or the days to start a business, trade policy, those things that might be either barriers or spurs to economic development we want to see.

Investing in people, you could have public expenditure on immunization, public expenditure on primary education, and -- and interestingly, girls education completion rate, which we see -- think to be extremely important.

Ruling justly, I think we're more familiar with. I mean, civil liberties, political rites, voice and accountability, rule of law, and significantly control of corruption.

The MCC board selects eligible countries using the above methodology and submits a report to Congress, and the selective countries are then eligible to begin developing a compact proposal for MCC consideration. At this time, we have 11 signed compacts in place, representing a total of nearly $3 billion, supporting programs in agriculture, infrastructure, land tenure, healthcare, and other sectors. Most compacts extend over a five-year period.

Mr. Boyer: Mike, does the MCC dedicate any funds for those countries that do not specifically meet the compact criteria, but are moving in the right direction? And if so, how?

Mr. Ryan: We do, Pete. We offer a threshold program that provides financial assistance to help improve a score on one of our -- of the 16 indicators that I mentioned.

The board of directors selects the countries for the threshold program based on their overall performance on all 16 indicators and their demonstrated commitment to improving the scores and their ability to undertake reform. Countries selected for threshold consideration must create a plan that identifies miserable ways to improve a specific indicator score and they must submit that plan for MCC review and approval. We make threshold program agreements with countries whose plans demonstrate meaningful commitment to reform and a high likelihood of successful implementation. And, of course, the measurement of that success is, again, done outside of MCC. I'll just give you two examples.

In the first case is the government of the Philippines, which actually passed the corruption indicator, but both the government of the Philippines and MCC felt that we would like to work more on this. And so, we made $21 million in threshold funds available to the Philippines in 2006 for anticorruption efforts. And what was really exciting about this was that the government made a decision to match those funds fairly closely so that it doubled the amount that was available, and we view this as a real commitment to reform on behalf of the people of the Philippines.

Another example that's not corruption was in 2005, Burkina Faso in Africa became the first threshold country to be approved for a compact funding. Burkina Faso was awarded $12.9 million for its threshold country plan, which was designed specifically to improve girl's primary education completion rates.

Mr. Boyer: Those are powerful examples. What does it mean for compacts to enter into force, and how does it relate to the actual disbursement of committed MCC funds to recipient countries?

Mr. Ryan: Well, this is another term of art. A compact is a contract is between MCC and a foreign government. It sets out the terms of the programs to be funded along with the funding to be dedicate in each year -- in each compact year for specific project components.

For example, a compact might set out dollar amounts anticipated to be spanned in each five years on a component such as improvement of a particular set of rural roads to get products to market, for example. The compact also outlines the general terms of the road improvement work to be undertaken. The signing of the compact commits the full funding for the specified project in a given country. After the signing, we continue to work with the country, we do due diligence, and we make sure that all conditions are in place to support a proper disbursement of funds.

When those conditions are met, then we declare the compact ready to enter into force, we obligate the funding and technical terms and the disbursements begin thereafter.

Mr. Boyer: Mike, to supplement its organizational structure in assisting caring out its mission, MCC has several formalized interagency agreements, or IAAs, with other federal government agencies. Could you elaborate on these collaborative relationships?

Mr. Ryan: Well, I think that -- that with a small organization, it must be clear to everyone that we can't do everything that is necessary for us to succeed. So, we have a number of these kinds of agreements.

For example, the National Business Center of the Department of Interior pays the MCC employees and provides financial systems and some accounting support. We also work closely with USAID, and to some extent, with the Department of Justice for the threshold programs that we discussed earlier. Treasury also provides technical assistance, especially in the banking sector, and from time to time, no doubt will sign other IAAs with other federal entities as the need arises.

Mr. Morales: Excellent. How is the MCC managing its program development efforts? We will ask Michael Ryan, Vice President, Administration and Finance for the Millennium Challenge Corporation to share with us when the conversation about management continues on the Business of Government Hour.


Mr. Morales: Welcome back to the Business of Government Hour. I'm your host, Albert Morales, and this morning's conversation is with Michael Ryan, Vice President, Administration and Finance with the Millennium Challenge Corporation. Also joining us in our conversation is Pete Boyer, director in IBM's federal consulting practice.

Mike, how does the MCC make sure that compacts with partnered countries are going to produce the results that will satisfy the U.S. taxpayers and meet the goals of the MCC?

Mr. Ryan: Well, I think that the U.S. taxpayer has shown the willingness to fund humanitarian assistance and assistance to poor people, as long as the overhead is not too high, and as long as the goals are worthy, and the people that really need the assistance receive it.

To ensure that we meet some of these expectations, MCC forms a transaction team whose members work closely with representatives from the country developing a compact proposal. Our teams include people with a range of a pertinent expertise in economics, law, and the appropriate technical areas, such as engineering or agriculture. We may also have someone who's an expert on gender issues, for example, or other social issues, or even the environment.

Partner country representatives are expected to engage in wide consultation with members of the public in a civil society in their own countries to ensure their compact proposals reflect needs identified by their own people and the poorest among them, and that the solutions are likely to work best for them.

MCC transaction team members evaluate all parts of a proposal and work with partner country representatives to develop practical, well-designed programs that incorporate steps to measure and evaluate results. MCC's investment committee, on which I have a vote, also plays an important role. It's chaired by the deputy CEO and is composed of MCC's senior officials.

The MCC committee considers all aspects of compact development and votes up or down any aspect along the way. MCC's board of directors, of course, has the final vote on a compact. The best designed compact programs are in the support of the investment committee first, and then the board of directors by incorporating meaningful evaluation of results and showing the promise of reducing measurably the number of people living in poverty. And, I might add, all of our discussions of the size of our staff and the amount of money that we put into overhead I think is an important one because we try to keep the overhead fairly low.

Mr. Morales: Now, Mike, as the -- as the CFO, many of our listeners may find it interesting that the MCC has identified that Chief Financial Officers Act of 1990 and the Federal Financial Management Improvement Act of 1996, and various other financial laws and regulations did not cover your operations.

What is MCC's basis for this position and does the MCC plan to follow at least the spirit, if not the letter, of those laws because they make good business sense?

Mr. Ryan: Actually, Al, we do manage our business according to the mandates of these laws and regulations. As we've said several times, we're small and organized as a federal corporation, rather than as a typical independent agency. And we were established after many of these laws were enacted. But we comply with them, however, and because we're part of the executive branch, and because they make good business sense.

For example, we issued our financial statements on November 15th with the rest of the federal government, and I might add, we got a clean opinion on that, and we intend to do similar things in the future.

There have been a number of government management reforms enacted in legislation in recent years. Most of them aimed at focusing agencies on managing for results and enhancing accountability for program outcomes. I'd like to think that MCC was designed to accomplish both of these ends, so it is not a stretch for us to follow the course outlined in legislation.

Mr. Boyer: Mike, on a similar topic, a key element of all compact development and execution is fiscal accountability. You know, the mechanisms and processes that assure that funds are managed properly and procurements are undertaken in a fair, open, and transparent manner. However, some of the compact countries do not perform accounting on a accrual basis by recording commitments and obligations.

Would you elaborate on the guidance provided to compact countries and requirements placed on those countries, and how has MCC handled this situation?

Mr. Ryan: Well, Pete, that's a question that's going to warm accountants' hearts all over the city this morning. MCC has a department of accountability which is responsible for these matters, and my department, of course, supports their work. Consistent with our model of country ownership of MCC-funded projects, compact countries must have internationally recognized system of accounting in place. It does not have to be identical to the U.S. model, but has to be recognized. We're constantly refining our approaches to this and expect to see continued improvements in the future.

For example, we require compact countries to have a fiscal agent and a procurement agent that we consider to be technically qualified. But while some countries might not use accrual accounting, the accountable entity, which is the organization set up in the country to carry out the compact by the government of that country, the accountable entity, often referred to as an MCA, set up by the government of a compact country must provide us with regular estimates of their cash needs. And these actually can serve as a surrogate for accruals, and indeed, we did an accrual in our financial statements just like every other federal entity on November 15th, as I mentioned before.

Mr. Boyer: Well, Mike we're -- we're glad we can get the -- the hearts of the accountants warmed up this morning.

Mr. Ryan: Let's not warm them too much.

Mr. Boyer: The USAID Office of Inspector General identified vulnerabilities affecting the MCC program in several criteria areas, including procurement, cash management, and disbursement that may adversely impact its financial operations. For example, the IG identified that the MCC Cape Verde compact had problems in the areas of cash management and procurement.

Could you elaborate on the MCC strategy for mitigating such risks and vulnerabilities? Specifically, has the MCC established policies and procedures for evaluating disbursement requests submitted by recipient countries to ensure that the amounts disbursed are only for immediate cash needs?

Mr. Ryan: Sure. First of all, I -- I have to point out that we have a very collaborative relationship with our IG. And I personally engage in conversation with IG staff on many issues, including the one you're -- you're asking me about. And while we do not always agree, we receive many useful recommendations that have caused us to improve our procedures. And we've been working on some exciting -- at least exciting to me, possibilities to enhance mechanism for getting funding out to compact countries.

Our current approach requires quarterly disbursement requests from a country. It comes into MCC, we consider it, and we say yes to the -- to the funding, its justified under the compact or -- or we ask questions. But we disburse on a monthly basis, asking the country to project their cash needs for the coming month, as I mentioned before.

However, we are in consultation with the Department of Treasury right now to see if we might use their Web-based online system for making payments worldwide. They call this system ITS. This would enable us to require that fiscal agents I mentioned previously overseas to request payments based on specific invoices and to justify disbursements in a systematic way in -- in real time. In addition, we're investigating to see if there might not be a private sector that would provide a -- a global payment solution, as well.

Treasury is interested in working with us on a solution in either case, and if we can't do this, I believe it would address the IG's concerns that you've -- that you've mentioned before. I'd also like to be able to try a pilot as early as January of 2007, so quite soon with -- with one or two countries to see how this actually might work in -- in reality.

Mr. Morales: Michael, we talked earlier about some of the interagency collaboration, and we know that the MCC has outsourced much of its administrative functions, including human resource and payroll management.

But does the MCC recognize the value of implementing an integrated human resource and payroll system, and can you elaborate on the status of this effort and the overall strategy to forge an integrated system that reduces the reliance on manual processes and enhances your interface with the NBC systems?

Mr. Ryan: Well, that's a great question. I mentioned before our -- our interest in keeping overhead down and of course manual processes are done by people, and people are overhead. So, we want to cut down on these things. They also introduce errors, as everyone knows, and -- and we'd like to do as much as possible automatically and with an -- with an integrated system.

We get great service from Interior's National Business Center, but it does not have an integrated system at this time. I understand they have long-term plans to make it integrate in the future, but at the current time, it's simply not.

The benefits of integration are especially important for a small organization like MCC. We do not have the personnel to make the multiple entries required by a non-integrated system, especially as we take on more compacts and more countries. We will be engaging consults soon to perform an analysis of how MCC might best achieve full integration of its financial management. And also, I hope a reasonable timeframe for achieving it.

You know, I am intrigued by efforts to engage private sector organization as -- as a center of excellence to supplement governmental centers of excellence. I am very familiar with the competition that's been going on at EPA, and I'm -- I'm looking forward to see the results of that competition for running their financial system. It's something that I saw at the beginning of when I was -- when I was at EPA. And now, I read recently that OPM is -- is also looking for a private public competition in this, and I think that's really healthy and something that might work very well for MCC.

Mr. Morales: What does the future hold for the Millennium Challenge Corporation? We will ask Michael Ryan, vice president, Administration and Finance with the Millennium Challenge Corporation to share with us when the conversation about management continues on the Business of Government Hour.


Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and this morning's conversation is with Michael Ryan, vice president, Administration and Finance with the Millennium Challenge Corporation. Also joining us in our conversation is Pete Boyer, Director in IBM's federal consulting practice

Mike, in its rather brief existence, the MCC has had some significant achievements, and we've certainly talked about many of those today.

What do you envision for the MCC over the next 5 to 10 years, and what are some of the key challenges and major opportunities facing the organization?

Mr. Ryan: Well, our overwhelming challenge is going to be compact implementation. We've been talking about performing the compacts, and that's what the corporation (off mike) spending its first two and a half, three years of existence doing. But making sure that results that we envision are achieved is our next challenge. Most of the work will be undertaken by partner countries, as they own the projects. So, it's really more of a challenge to them. And the real beneficiaries -- if -- if both us, that is to say MCC and the host governments are successful, the real beneficiaries are the poor people of our partner countries.

Mr. Morales: Mike, with such a small organization, I can only imagine that every single individual has a critical role and -- and is critical to the organization.

To that end, what steps are being taken to attract and maintain a high -- high-quality technical force, and can you elaborate on initiatives to ensure that you have the right skill and the right staff mix?

Mr. Ryan: First of all, let me say that I don't think any organization in my federal career can claim a higher quality workforce than MCC. And we owe that in part to the attractiveness, I think, of our mission, but also we've talked a lot today about public/private partnerships.

We have a partnership with Korn/Ferry International, in particular their Futurestep Division, which ahs been supporting our recruiting and hiring efforts. We've also been energizing our recruiting efforts through partnerships with targeted non-profit organizations who subscribe to our belief that, and this is a term we think has some power, that a diverse workforce can make a world of difference. And as far as training goes, I've been tasked by our CEO to create an overarching training plan for MCC. Everything from language skills to management skills. And we're beginning with training for all our transaction teams in partnership with the Federal Executive Institute.

Mr. Boyer: Mike, you mentioned MCC's focus on low overhead, and we've talked about it on a number of questions today, but how do you respond to people in a developing community that have expressed that MCC's proposed staffing level of 300 is very lean for an organization planning to disburse $2 billion or more per year?

Mr. Ryan: Well, you know, when the road is -- is twisting and turning and you're in a race, you'd rather have a sports car. So, we're -- we're -- MCC is based on a new organizational model. And we think our -- our leanness is an asset rather than a liability.

The key to our ultimate success has got to be related to our ability to identify the right countries with the right governance and respect their responsibility for their own development. We believe this approach is more likely to give arise to sustainable efforts and lasting reduction in poverty.

If we were to increase our own numbers, we might be -- just might be more tempted to give ourselves a larger role in other countries' efforts, and we really don't want to do this. Having said that, we are concerned with the growing workload, and we're constantly looking for ways to streamline our work and procedures.

In fact, it's interesting as far as this question goes that as I left MCC to come to this program this morning, we'd had a little meeting in which we talked about our model and whether we should change it, what aspects we should change to meet the challenge of the growing workload that's -- that's certainly coming. But I'm confident that this is a problem that we can meet square on, and we aren't going to go above 300 people in Washington.

Mr. Boyer: I like the race car analogy, Mike. MCC's compact pipeline seems to be robust and growing. Could you give us a sense of the current and future pipeline, and is there a point at which expansion becomes too much for a fairly new organization like the MCC?

Mr. Ryan: Well, obviously, I can't predict how much the pipeline will develop, and because so much of our future activities will depend on congressional funding, and that again will depend on what we do in our measurements of success. But we've been signing. This past year, we've signed six compacts, and I would think that this year, I would hope we'd sign three or four. But beyond that, it would be difficult to speculate.

We've learned a great deal about what works and doesn't work based on our experience with the 11 compact countries so far and recognizing that individual circumstances make each nation unique in its capabilities and the development issues that it seeks to address, we know that we found some approaches that are replicable, and we may identify some efficiencies as a result.

Finally, I really think being a new organization is a benefit because we can implement new ideas without being burdened by our past. Perhaps a real challenge is to remain, as the song goes, "every young," and avoid the bureaucratic impulse.

Mr. Morales: Michael, you've had a highly distinguished career in public service spanning some 25 years, as you indicate.

Is there any advice that you would give to an individual who is perhaps considering a career in public sector, or who may have a specific interest in the efforts at the MCC?

Mr. Ryan: I think the most important question might be why should someone want to work for the United States government? Because, after all, MCC, even though we're different and new, is part of the -- is a part of the federal community. The answer, I think, has to be, because it's the largest, most ambitious, and most diverse enterprise in history. Working for the federal government means upholding the principles on which the country was founded in the form of the Constitution, which is still the model for many countries, and many of the countries we deal with. The federal mission is also large enough to accommodate just about any interest or skill.

What's the best preparation for a federal job? I think everybody has their own concept, but I always recommend that people get the best general education available to them, especially in the liberal arts. But, to me, that means science, math, history, and language, before they specialize.

USA Jobs is a central Web site for all federal jobs openings, and it really does contain something for everything. Our Web site also provides the ability for individuals to go on and do online applications for our jobs, and actually anybody who comes to talk to us, no matter who they are or where they come from or what their background, ultimately, we ask them go back to our Web site,, and fill out an online application.

With respect to jobs at MCC, we find a variety of technical skills useful, much like the other federal agencies in the development community. But I would encourage people to focus on foreign language skills, with French, Spanish, and Portuguese, the most useful to MCC at this time.

To work with representative other countries, there is an obvious benefit to being able to speak and understand their languages. Of course, it's not just language; we can never have too many employees with skills that include communicating across cultural lines, regardless of what their technical expertise may be.

Mr. Morales: That's fantastic. Mike, we have reached the end of our time, and that'll have to be our last question.

I do want to thank you for fitting us into your busy schedule this morning, but more importantly, Pete and I would like to thank you for your dedicated service to our country.

Mr. Ryan: Well, thank you. It's a great honor for me to be here. It's a great pleasure.

I'd like to invite everybody who would like to learn more about MCC, certainly more than -- than I was able to give this morning, to go to our Web site,, and there you can see information about countries, about our programs, and also apply for a job if you want, as I mentioned before.

Thanks a lot; I appreciate being here this morning.

Mr. Morales: Fantastic. Thank you.

This has been the Business of Government Hour featuring a conversation with Michael Ryan, vice president, Administration and Finance with the Millennium Challenge Corporation.

Be sure to visit us on the Web at There you can learn more about our programs and you get a transcript of today's conversation. Once again, that's

As you enjoy the rest of your day, please take time to remember the men and women of our armed and civil services abroad who can't hear this morning's show on how we're improving their government, but who deserve our unconditional respect and support.

For The Business of Government Radio Hour, I'm Albert Morales. Thank you for listening.

Kimberly Nelson interview

Friday, October 22nd, 2004 - 20:00
"The EPA is collecting the information we need to understand the condition of the environment. It’s important to have the right information to make sure tax dollars are being spent wisely and for management purposes."
Radio show date: 
Sat, 10/23/2004
Intro text: 
Technology and E-Government; Green...
Technology and E-Government; Green
Magazine profile: 
Complete transcript: 

Tuesday, September 28, 2004

Arlington, Virginia

Mr. Lawrence: Good Morning and welcome to The Business of Government Hour. I'm Paul Lawrence partner in charge of the IBM Center for the Business of Government. We created this center in 1998 to encourage discussion and research into new approaches to improving government effectiveness. You can find out more by visiting us on the web at

The Business of Government Radio Hour features a conversation about management with a government executive who's changing the way government does business. Our special guest this morning is Kim Nelson. Kim is the Assistant Administrator and Chief Information Officer at the Environmental Protection Agency. Good morning Kim.

Ms. Nelson: Good morning.

Mr. Lawrence: And joining us in our conversation also from IBM, is Dave Abel.

Mr. Lawrence: Good morning Dave.

Mr. Abel: Good morning Paul.

Mr. Lawrence: Okay, let's start by talking a little bit about the EPA. Could you give us a historical background of the EPA and explain its mission to our listeners?

Ms. Nelson: The Environmental Protection Agency I think is an organization that most Americans recognize. It was created back in 1970, right around the time of the first Earth Day, and it was created as America was really getting an interest and awareness of the environment. Everybody wants clean air, wants safe drinking water, wants land that's clean to live on and living communities that are safe for our children to grow up in. And therefore EPA was created to help provide that kind of mission for the country.

Mr. Lawrence: Could you talk to us a little bit about the EPA's interaction and relationships with other Federal departments and agencies.

Ms. Nelson: Sure, you know, when people think of the environment often EPA is the first agency that comes to mind but really there are many Federal agencies that have some kind of responsibility for protecting the environment. For instance, the Department of Interior manages over 500 million acres within the country. In fact one-fifth of all the land in the United States is managed by the Department of Interior through their park service and through national lands. Likewise the Department of Agriculture manages all the forest land within the country that is owned by the government. And you have a handful of other agencies that also some kind of environmental responsibility. So in doing our mission we have to work with many other Federal agencies.

Mr. Lawrence: How do you describe the size of EPA's budget and its number of people?

Ms. Nelson: EPA is a fairly large agency, even though we are an agency and not a department. We have almost 20,000 employees across the country. We have a headquarters that's rather large here in Washington but we also have 10 regional offices across the country and I really think that's where the rubber hits the road in terms of EPA working with states, working with local governments, and working with tribes to fulfill our mission.

Mr. Lawrence: And how about the skills of the people, as you were describing the environment, I began to think about the scientists and the like, maybe you can describe the capabilities of the team?

Ms. Nelson: Well, we certainly do have a lot of scientists and more and more I think one of EPA's core missions is in the research area. There are lot of questions that are still unanswered to us today. Even 30 years -- more than 30 years after the agency was created, there are so many answers that we still don't have today. Particularly answers like linkages between environmental conditions and health conditions so certainly the science is an important part of EPA's mission.

In addition we have a lot of engineers. We have enforcement officers, lawyers. We have people who analyze programs trying to ensure that we're achieving the results we want to achieve. So we have a broad array of different kinds of people working at EPA with different backgrounds and skills. In my own office, I'm in the Office of Environmental Information of course.We have tremendous focus on technology and therefore the -- the skillset that we have in my office has more of a focus on technology, information science, information management, librarians, people who know how to access information, display information, disseminate it; people who use geospatial tools, a lot of people with geography backgrounds because that's an important part of how we share and display information.

Mr. Lawrence: Let's talk a little bit further about the responsibilities of your organization. What are your responsibilities and duties as the Chief Information Officer?

Ms. Nelson: Well, that title Chief Information Officer is one that is probably widely known to a lot of people who work in the private sector. For government, the term is relatively new. I will say particularly coming from State government. And here in the Federal government back in 1996, the Clinger-Cohen Act was passed and under that act certain large agencies were required to create a Chief Information Officer position. That position as envisioned by the law was to be created in such a way that many companies, large companies in the private sector created CIO positions. The position for instance is to report to the head of the agency. There was a real acknowledgment at that point in time that the use of the information was a powerful tool to the Federal government.

The Federal government was making a tremendous investment of billions of dollars in information management, information technology tools and therefore they felt that the CIO who has authority generally across an organization to make investment decisions and technology decisions was a wise position to have in the Federal government.

Mr. Lawrence: You mentioned background in the State government. Can you tell us about your previous experiences before becoming CIO?

Ms. Nelson: I have been in Washington now for three years, before that I worked for 22 years in the State government. I held a variety of positions. Interestingly enough I spent 22 years as an at-will employee or as a political employee, never having a civil service position. I believe that sort of gave me the desire everyday to get up and do an outstanding job because I didn't have civil service protection. I started in the Senate of Pennsylvania as a Legislative Aid. It was a tremendous way to get experience of the State government at large, everything that happens in the State government. I left there and I went to a regulatory agency, the Pennsylvania Public Utility Commission and I worked for the Chairman of the Public Utility Commission.

There I think I really got interested in regulatory issues. I was there at a phenomenal time. I was there during the accident at Three Mile Island. I happened to live just outside of Harrisburg, when that accident occurred and much of the work we did then was dealing with the aftermath. The clean up there, the cost associated with it. I was there during the break up of the 18 bell companies. Again it was an interesting time in the regulatory arena. I left there and spent a short amount of time working in Governor's Office Administration, the Department of Ageing and really recognized that I want to get back into a regulatory environment and went to work for the Department of Environmental Resources. I spent 14 years working there before I came to EPA. And it was there at the department of environmental resources where I was tapped to be the first CIO ever for that particular agency.

Mr. Lawrence: So how -- how did these experiences together help you to be able to prepare for the responsibility that you now have in the EPA?

Ms. Nelson: I come to this CIO position perhaps a little bit differently than a lot of people. I don't have an IT background. I don't have a degree in information technology, computer science information management. My bachelor's degree is in secondary education and political science. My master degree is in public administration. I cannot be jobbed really from a management perspective saying what does a manager need to do for their job by way of information and it was very apparent back then in our environmental agency. We didn't have the kind of information we needed to know, whether we're doing good or not. We couldn't compare one program to the other in terms of were our facilities in compliance with our laws.

We didn't have information to really tell us whether the air was getting better, the water was getting cleaner. So we didn't have the kind of management information we needed to always make the best management decisions in terms of where our resources should go or how our budget should be allocated. And that's what drove me into this field, which was to say how do we as an organization then start to collect the right information to use for management purposes.

Mr. Lawrence: You mentioned the management information, I want to take you back to compare some of your State experience with your Federal experience. Give us a sense of you know, how would you compare the different management approaches at the two levels of government?

Ms. Nelson: Well, it's funny you should ask that question Paul, I was testifying before the Congressman's Putnam's Committee and at the tail end of the hearing he asked that exact question, how would I compare my State experience with my Federal experience. There're many, many similarities: the mission of our organizations are similar, the demands that we have from the public are similar, the challenges we face are similar. The one thing that is very different here in the Federal government is the focus on information technology and information management from so many areas.

The Federal -- the State government, excuse me, it almost happened unnoticed but here in the Federal government there's a tremendous amount of interest from Congress. You know, I've testified a half a dozen times already before congressional committees. I never did that in the State government. There wasn't that kind of interest from the general assembly. The General Accounting Office, the number of audits that my office goes through from the General Accounting Office again is another indication of the inspector general, the OMB all of that oversight is very, very different here in the Federal government than what I ever experienced in at least my own State government career.

Mr. Lawrence: And how about the speed of decision making, how would you compare the two levels?

Ms. Nelson: The speed of decision making, I think, depends on the nature of the decision that has to be made. There are clearly some instances where I could point to my own State career where I was able to make a decision on the spot and have that implemented, but here in the Federal government so many of those decisions are in fact covered by regulatory requirements that a decision that was very simple in State government that I made on my own and had implemented within 24 hours, actually here in the Federal government would take a rule making, or would take years to implement.

Then again there are many other decisions where we can make them just as quickly here and that's not the case so it really depends on the nature of the decision although in general there is more bureaucracy here and more red tape and it is more difficult to get things done.

Mr. Lawrence: It's an interesting point especially about the speed and the different issues. Information collection and dissemination is a big part of what the EPA does, what are the management challenges in doing this? We'll ask Kim Nelson of the EPA for her perspective when The Business of Government Hour continues.


Mr. Lawrence: Welcome back to The Business of Government Hour, I'm Paul Lawrence and this morning's conversation is with Kim Nelson. Kim is the Assistant Administrator and Chief Information Officer at the Environmental Protection Agency. Joining us in the conversation is Dave Abel.

Mr. Abel: Kim, the Office of Environmental Information or OEI has numerous responsibilities including the collection and dissemination of environmental information with external stakeholders. What kind of data does your office collect and how do you use it?

Ms. Nelson: Dave, let me just do a minute on what the Office of Environmental Information is about because I think that's important. Next month, October we will be celebrating our 5th anniversary as an office and it was created solely for the purpose of recognizing that EPA did not have the information it often needed to manage its programs. So if you look at the Office of Information, of Environmental Information, we have a broad spectrum of responsibilities. And they almost follow the lifecycle of data, how you collect it, how you store it, how you disseminated it. One of those key responsibilities is information collection and what's really fascinating is EPA is a little different from most Federal agencies and that so much of the Federal law is delegated to States and tribes.

For instance if you take our major air, water and waste management programs, those programs are all delegated for the most part to our states. That means 95% of the information in EPA's computer systems comes from the states. So for us a large challenge is how do we collect that information from our state partners, our tribal partners in a way that's a standardized format that allows us to then aggregate the information in a way that's valid so we can get the national picture. So a core part of what we collect is from our state partners. We also though have some direct regulatory responsibilities with facilities.

For instance in my office of Environmental Information, we have something called the Toxic Release Inventory program that requires facilities once a year to submit a report directly to EPA that tells us how much material they have released to the environment either the water, the air, the land that's of a toxic nature. Those reports come directly to us for tens of thousands of facilities across the country. So there's information collection requirements span, municipal government, tribal government, State governments, and facilities.

Mr. Lawrence: It seems to me with the delegation of responsibility for the collection of so much data the quality assurance has to be a big concern for your -- for your organization. What type of quality assurance programs are in place or under way to make sure that the data that's collected is both accurate and reliable?

Ms. Nelson: It's a huge issue for us in fact, last year for the first time EPA put on the street, last June what we call a draft report of the environment. It's hard to believe with the agency having been in existence of over 30 years, last year was the first time we ever put a report out to the public that told us what we knew and didn't know about the condition of the environment. And in some respects we couldn't answer those questions because the quality of the data wasn't high enough to provide answers that we thought were scientifically valid. So data quality is a huge issue for us.

One of things we've done is, we work very closely with States and tribes on data standards, because one of the things that's important is when we aggregate the data we're not mixing apples and oranges--that we all have the same definitions and standards. So about 5 years ago we started a data standards counsel with State, tribes in EPA and that's been very successful. We've worked through some really tough issues like how do we identify facility, what we call chemicals, what are our biological standards, permitting of standards, enforcement of standards, what do you call an inspection, and what do you call an enforcement action. They are important decisions because when we aggregate that information across 50 states we have to have the right picture. That's an important step we've taken.

We also have, I think a very good quality management program with EPA. All of our programs have to have quality management plans for all their information systems. And this year for the very first time we actually have every program in EPA with an approved quality management plan in place and I think that's -- that too is a big step. The last thing I'll just say we're doing is we know data collection is important to EPA. We know we collect data from a lot of different sources and one of the most important things we can do to improve the quality is make sure it's right before it ever gets to us. So we're putting in place a lot of validation techniques.

For instance we have our central data exchange. That's our portal, the single point through which all data will be received by EPA in the future and built into CDX are the tools and the technology to help ensure the highest level of data quality as those reports or submissions are being received. And we have seen for instance just this past year, our toxic release inventory reports. We know that when people submit those electronically over the internet through a central data exchange, we see a 25% higher rate of quality in terms of errors coming in the door than we see on paper reports, so we know it works.

Mr. Lawrence: Well, better data in clearly means better information out. Once you've collected the data what types of products are produced? Can you give us a couple of examples of how EPA actually uses the information once it's been collected?

Ms. Nelson: Boy, the examples are limitless. I'll go back to the one that I just mentioned because it's one of which I'm so proud and it's last year's EPA's draft report on the environment, again it's hard for me to believe, an agency of our size, an agency that has budget of almost a billion a year has never been able to tell the American public what we know about the environment and what we don't know. That was really an initiative of Governor Christine Whitman's when she came on board. She pledged that before she left she would give the American public what she liked to call the report card about the state of the environment and we were able to do that.

We are now working on our second report card and that's really fashioned in a way that's easy for the American Public to understand, based on some common questions, like is my water safe to drink, are the fish safe to eat, what's the condition of indoor air and what contributes to bad indoor air. The kinds of things that effect, you know, you every day or as a parent you are concerned about. That's one important tool we use. Another is getting information out to the public on our website. My office is responsible for managing our website and I think EPA has one of the most impressive set of tools to share with the American public about what we know about the environment today.

One of them is windowed in my environment--a very simple tool on our website. Go in and put your zip code in and we will tell you based on your zip code everything we know about that part of your community. What facilities are there that we regulate, what we know about their discharges what we know about their permits and violations, it's all right there in one place.

Mr. Lawrence: In addition to the public who are some of the other stakeholders that use the information and how do you make information available to them?

Ms. Nelson: Well one of -- certainly in an audience that we're concerned about, we work with closely are other decision makers throughout the United States. Certainly EPA with its 18,000 employees we recognize we're not the only environmental professionals out there and without environmental decision makers at the local level and local governments, at county levels, in state governments, in tribes. So one of the things we try to do is make sure that as decision makers across the country, we all have access to the very best information, because we're spending, you know, cumulatively between states and EPA we're spending over $20 billion in tax payer money. It's important to have the right information to make sure these dollars are being spent wisely.

Mr. Lawrence: You mentioned the Environmental Information Exchange Network. Could you tell us more about this, the history of how it came into being and how it works?

Ms. Nelson: Well as I talked about it earlier, EPA is an agency where our responsibilities are so highly devolved down to the state that it became apparent if we were going to do our job as co-regulators we really had to be in a partnership in sharing information and we -- the world at the time was such that states were spending more and more money on their own information systems. They weren't relying on EPA's information systems, which were becoming more outdated. States were building their own information systems and actually building integrated information systems. So it was important we partner with them to share the information. I think that the network is based on a very -- you know some very simple concepts.

And one is the e-commerce concept. We recognized that the world was changing and technology was bringing to us the ability to use the Internet and standard e-commerce tools to our advantage. Things like data standards, trading partner agreements for companies that were sharing information--they were being used for the same reason we needed to be able to use those. So, the technology was evolving and we could rely on the Internet.

The second core concept was, as I mentioned earlier since 95 percent of our information comes from the states, it's important that the states be the stewards of their own data. If you have to maintain two different information systems, one for EPA and one for yourself, which one's going to have the highest quality data? The one you're using, not the one you're feeding to EPA. So it was important we eliminate this duplicate system and ensure that the states were in fact the stewards of their own data and that they collected the data and kept the data and that they kept it up to date and accurate and only provided access to EPA of the data we needed. So this is about states, EPA, stewarding their data, making sure what we collect is of very high quality and then sharing it. So what our network does is encourage everyone to put a node on the network using common standards and technology and on that node you would place data that you want to share with other people.

They maybe openly available or it may only be available through a trading partner agreement. But that data then is data that you own, you decide to share, you decide with whom you're going to share it and what the conditions are in terms of sharing that data through a trading partner agreement. And we're seeing as a result of that higher quality data, more accurate data, more timely data being available for decision makers.

Mr. Lawrence: That's a very interesting point, especially about the reduction and the redundancy. Technologies used to drive EPA's operations. How is the EPA addressing issues such as interoperability and enterprise architecture, we'll ask Kim Nelson of the EPA to take us through this when The Business of Government Hour returns.


Mr. Lawrence: Welcome back to The Business of Government Hour, I'm Paul Lawrence. This mornings conversation is with Kim Nelson, Kim's the Assistant Administrator and Chief Information Officer of the Environmental Protection Agency. Joining in our conversation is Dave Abel.

Mr. Abel: Kim, we spent the last segment talking about the information that you collect from external stakeholders and the reporting and analyses you do against that information. But you're also responsible for the technology that derives the operation within EPA. Can you give us an idea of what that entails and what your office is doing to promote efficiency and interoperability within the organization?

Ms. Nelson: The OEI has many of the traditional responsibilities and as the CIO, you would expect to find in terms of managing operations within an organization. For instance we're responsible for providing secure access to our network and that includes thousands of applications and all of our databases. Some are very sophisticated scientific computing and now with good computing and communications, so that's pretty standard but we're really evolving into a lot of the new or super computing and good computing areas that are -- I find very exciting particularly in partnership with our researchers in the organization.

One thing that is I guess we're very fortunate in EPA and as I talk to my colleagues I recognize more and more we're fortunate, EPA has the entire organization on an agency wide e-mail and Lotus Notes system. I'm shocked when I talked to my colleagues in other federal agencies and realize they're still using multiple e-mail systems but we are using this efficiencies and we're talking earlier about how we're using SameTime and those Lotus Notes and collaborative tools to help us manage the organization and work more effectively. I find that very exciting as people are discovering the potential there. Security is a major issue for us as it is in all organizations. We've come a long way in security in this organization.

Four years ago EPA actually had to shut down its Internet access because there were so many potential security breaches acknowledged in the GAO report. We've reached a point now where last year in the President's budget EPA was cited as "the model" for having the best security program within the Federal government. So we still have many challenges ahead of us, there are still a lot of work in terms of what we have to do in management operations, there are some of the things we do on the internal side, on the external side I was talking earlier about for instance, central data exchange. Managing that project and running that operation for users on the outside is very important to our relationship with our partners.

Mr. Lawrence: One of the topics that we normally interact with -- we talk to CIO's on these shows and elsewhere as enterprise architecture. I know it's a very complex subject. Could you describe the value of the enterprise architecture at the EPA?

Ms. Nelson: You know, enterprise architecture is an interesting term and I have learned in 3 years in the Federal Government that we all may be better off if we stop using the term enterprise architecture because after so many years there are still so many people who find it very difficult to understand. And I'm not sure why because to me, all enterprise architecture is, is a very basic blue print or a picture. It's being able to describe graphically the business of the organization so that you understand the business of the organization and you can make the best resource decisions for your organizations in terms of where you put your people, where you put your technology, where you put your money in terms of providing tools for your organizations and solutions.

So it's been an interesting journey over the last few years. So I've learned to stay away from the term and my goal over the next year is actually to -- not use those words "enterprise architecture" but to focus solely on business results. What are the solutions we need to put in place to ensure the business results of the organization and that's understanding our strategic goals and making sure that we're investing our dollars to achieve this strategic goals.

Mr. Lawrence: Well with the blue print and understanding the business results, have there been any new technology initiatives that have happened as a result of sort of putting those two together?

Ms. Nelson: Oh clearly, I think as we look for instance to build our portal one of the things we're trying to do is look at our shared -- what I'd like to call shared services. What are the things we want to build one time in EPA, share with the rest of the organization, in other words build once use many and our portal will do that. What we envision through our portal is to have that single place where people outside the agency can come who are co-regulators, people inside the agency to access the information they need. So we're building the core share services that are identity management, security, and our backend registries that will house the information that people most often want to get out of our databases. It is the tools to manipulate that data, to actually extract that data, manipulate and display it.

So for instance, that then becomes an implementation of our enterprise architecture because we're building a solution one time and we're providing that for many people in the organization. It meets the strategic goals of the organization it reduces duplication, and it helps get information in the hands of people as quickly as possible and very high quality information.

Mr. Abel: So we've talked quite a bit about what can be competing priorities. There are the priorities of the external stakeholders, information sharing consortium and there's priorities of the internal stakeholders managing the business of the agency. How do you balance the requirements between those two groups of stakeholders?

Ms. Nelson: Well if you do it right and you establish your priorities you can often find that a solution that you're putting in place to meet your external customers often meets your internal customers. For instance, recently and I've talked a lot about central data exchange, but it's really interesting when you develop a solution and you develop a solution that's built in such a way that it is sharable and usable and scalable. With our central data exchange we recently put that in place, while we built that originally as you know for communication with our state partners and our tribal partners.

We recently put that in place as a backend service for one of the Presidency Gov initiatives. We a partner with the, e-Gov initiative which is the way the federal government wants to centralize all the grant information for the Federal government. So if you want to find and apply for a grant you go to one place. We were actually able to use the web services tools of CDX to assist on the backend on an internal way, So it's wonderful when you find solutions like that that you can reuse and the more we develop solutions like that the more we'll be able to do that.

Mr. Abel: Well, let's talk about one initiative in particular. Can you tell us a bit about the environmental indicators initiative just a little bit about what it is and how it helps the EPA to manage the results?

Ms. Nelson: Well, as you know, Dave, over the years there have been many initiatives that required the government to focus on results. The government performance results act, what we have to do for our budgeting purposes, the most recent part tools that OMB is using to assess programs in terms of their effectiveness. But what we found is even some of those statutory requirements were lacking, at least within EPA. Because much of what we have to do has a long term horizon to it in terms of really understanding the condition of the environment and we tended to focus more on, as many people do, the widgets or the outcomes.

You know, how many permits were issued, how many enforcement actions were taken, those kinds of things versus what's the quality of the water across the country. And what we're trying to do with our environmental indicators initiative is to really focus for the American Public on answering those questions. Our very first step was the draft the report on the environment, I mentioned earlier. That was a first milestone and a very long-term effort.

One of the most important things we're doing right now is when we issued that report we were not able to answer almost three quarters of the questions in a very solid way. Some questions we couldn't answer at all, other questions we answered with what we recall like a level two indicator, with some information but it wasn't the very best. We are now looking at all of those gaps and to have a process in place for determining what are the highest priority gaps, how do we fill those gaps, what it will cost to fill those gaps, and what's the signs that we have to understand in terms of filling those gaps.

So, think of this as a very long-term initiative within the agency to truly begin to collect the information we need to understand the condition of the environment. And I'll just say as a final note, some people might say, you know I can't understand, you know you've been around on these 35 years, why weren't you collecting some of this information. Much of it is because of the change in focus, many of the laws that were in place directed certain activities to take place, like issue permits and performance inspections and they were the things we had to report to Congress on. But you know, even if every facility has a permit out there, it doesn't mean the environment is getting better.

Even if every facility has been inspected it doesn't mean that the air is getting cleaner. So, we need to begin to collect the information so that we ultimately understand the outcome and we didn't do that before because the laws didn't require that. Now, maybe that's not a good reason, but we focused on what the laws required and now it's important to focus on the bigger picture.

Mr. Lawrence: It's a very interesting point, especially the alignments between the metrics and the ultimate outcomes, you want to have. Let me ask you to take that question into your office, what performance metrics do you use within the office to determine if the goals are being met?

Ms. Nelson: Well, we are meeting with the Office of Environmental Information's board of directors to adopt for the very first time a balanced scorecard. When I came onboard at EPA, it was less than two years old, and we really didn't have as an organization good metrics in place. We received, interestingly enough an internal grant from our Chief Financial Officer to put performance metrics system in place for the office environmental information, we're doing that starting October 1st, which is the start of the fiscal year and we're trying for the first time a balanced scorecard. So I'm sure we won't get it 100% right but it will be a learning experience.

Mr. Lawrence: Interesting, you will have to come back and tell us how it turned out. EPA is involved in many of the e-gov initiatives, how are they doing and what have been the lessons learnd, we'll ask Kim Nelson of the EPA to give us certain thoughts when The Business of Government Hour returns.


Mr. Lawrence: Welcome back to The Business of Government Hour, I'm Paul Lawrence. This morning's conversation is with Kim Nelson. Kim is the Assistant Administrator and Chief Information Officer of the Environmental Protection Agency, joining us in our conversation is Dave Abel.

Mr. Abel: Kim, the EPA is involved in 14 of the 25 e-government initiatives that are currently underway. Can you tell us a little bit about some of these initiatives?

Ms. Nelson: The e-government work is very exciting, you know, people said to me when I came to Washington, we talked a little bit about this earlier actually, how difficult it is to make a difference in a short period of time. Well, when I would look back and realize that this e-gov initiatives have only been underway for less than 3 years. I think it's phenomenal when we look at the progress. The e-gov initiatives are part of the President's Management Agenda. It's his desire, his vision to make sure that government is citizen centric, that government is result oriented and that we use market based solutions and that's what you're seeing in the e-gov initiatives. We're involved, as you said in 14 of them. That clearly keeps us busy because we're a much smaller agency than many of the big departments but so many of these are fundamental to how we work.

One of them that are very important to us is the e-authentication project. It's really what the federal government is trying to do to ensure that we can establish identity, authenticate users to ensure the proper transmission of electronic documents with electronic signatures. Our role, I think, in this is very exciting. We were recently given a grant and here's another way that government is being very innovative we got a grant from this project for $700,000 for EPA to be able to demonstrate the interoperability of digital certificates between state governments and the Federal government. So, we're demonstrating through all the work we've done with our state partners in CDX, how you can take a certificate that a facility has and using in State government and use that to authenticate a submission to the Federal government and vice versa.

Likewise, another project we're working on, which I -- would be remised if I didn't mention is the rule making initiative., EPA is the lead partner on that initiative, which means we're managing that with many other agencies as co-partners but we are the managing partner of that initiative and through that website "," citizens can go one place, for the first time ever one place and put in any kind of key word. If you're a farmer and you're interested in agriculture, if you're a teacher and you're interested in some education issues, if you're interested in environment, something like mercury, you can type in one key word and find every Federal agency that has some kind of rule making or policy open for public comment.

Mr. Abel: So, EPA is a participant in the e-rule making program with e-government, overall you are one of multiple participants?

Ms. Nelson: We're one of many participants in rule making but we are a managing partner. So it's my office that has the overall responsibility for managing that initiative. Each one of these projects has a managing partner and we have the responsibility for rule making and that's primarily due to, of course EPA being a regulatory agency, rule making is the large part of our business. If you look at the lines of business within EPA, we issue a lot of rules, much to the dismay of some people but that's the nature of our business and as a result of that OMB felt we had a tremendous amount of expertise to manage this project, on top of the fact that we already had an electronic docket system in place that is serving as the basis or the core for

That's the other great part about these e-gov initiatives is that throughout the federal government we're taking good ideas that already existed in one department and expanding those to many, many other agencies. So, we are reducing duplication, we were reducing redundant expenditures and we were taking a good idea and we're expanding it.

Mr. Abel: So, what are some of the management challenges that you faced in the implementation of these programs?

Ms. Nelson: The biggest challenge is that we're operating in a very innovative way. We are bringing partners together and working on common solutions and we are doing really terrific things in a way the Federal government never behaved before but we still haven't managed to get all the processes and the bureaucracy to catch up with that innovation and it makes it very difficult sometimes to do the very basic things we have to do, like move money around. Because when you have an initiative that involves 20 partners, that means 20 different agencies have to pay for that project.

Well, getting the money from 20 different agencies all at the right time, getting 20 different agencies to participate in a decision is not always the easiest thing to do. So, the governance side of the house hasn't quite caught up with the technology and the innovative thinking but it's not holding the projects up, it just means it's making a little bit more of achallenge to manage it.

Mr. Abel: Have there been any early successes?

Ms. Nelson: Oh, I think many of the e-gov projects could be called early successes. FirstGov for instance recently won a very prestigious award for being so citizen centric and has received tremendous number of awards. Rule making is a wonderful success; the business gateway is now up. If you're a small business owner and you haven't been there, you need to go to the business site. Because if you are a small business owner you can go to one place now and find what you need to do from an environmental prospective, or a labor prospective, an IRS prospective, and get all of that in one place. So these are the kinds of services that are being put in place for citizens across the country.

Mr. Abel: Can you describe the significant challenges that the EPA will face in the future?

Ms. Nelson: EPA's challenges for the future are the fact that in many respects we've managed to do the easy things. It's the 80/20 rule. If you look across the country, rivers that used to be black and polluted and burning are no longer there. I come from the state of Pennsylvania, if you think of what Pittsburgh looked like 30-40 years ago, where a man going to work in the morning with a white shirt had to change his shirt in mid-day because the air was so polluted. We don't have that problem in the United States anymore. We've made huge environmental progress.

The challenge we have in the future is that, in order to make the next incremental change improvement in the environment, it means it's going to involve every single person in this country. We made this huge environmental changes in the past by driving hard largely on industry, cleaning smokestacks, cleaning up industry but the biggest polluters today are you and me. It's the car we drive, it's the lawn mower we use, it's the gas grill we use, it's the fire places we burn in the winter time, it's our life-style that has the biggest impact on the environment today and that's hard for people to accept. It's easy for them to say, take care of that factory down the road that's spewing dirt out of its smokestack.

It's another thing to say to somebody, you know you should be driving a different car, you shouldn't be using your lawn mower, you shouldn't be using your grill. That changes your lifestyle and people don't like that. But we all have to look internally and make our own changes to our own lifestyle because if we do that, we can make a big difference. One thing I would encourage everybody to do, if you don't have fluorescent light bulbs in your home, put 1, 2, 3, 4 fluorescent light bulbs in your home, if you do that, if every single person in this country put a handful of fluorescent light bulbs in your home, we could reduce the number of power plants being built in this country and nobody wants a power plant built in their backyard. And if we reduce the number of power plants, we can reduce the air emissions, which dramatically improve air quality. So, doing simple things like that, like putting in a fluorescent light bulb in one room, one bulb in each room of your house, can improve the environment.

Mr. Lawrence: Let me ask you to take a step back and reflect on your careers. You think about maybe somebody interested in joining public service, what advice would give them?

Ms. Nelson: Well, for me -- you know I only have one prospective, I've only ever worked in government, it's certainly incredibly rewarding, the ability to impact public policy, the ability to make a difference in terms of how government serves citizens. It's something that's so incredibly rewarding. I would encourage people to try sometime in public service if you're currently working in the private sector. I would love to see the kind of work environment where people who are currently working in government could go also out into the private sector and spend some time in business because I think walking in another person's shoes ultimately always makes for a better person.

Unfortunately, we don't always have that flexibility and it would be great if the Federal government -- and they're looking at that, looking at ways to make it easier for people to move in and move out, even if it's for six months, a year or two years to gain some experience. So, I would encourage people to be as well rounded as possible. I regret I don't have the business experience. I tried to spend more time with people in the private sector to understand their needs and concerns. In the future I think we all will be better served if we could do that.

Mr. Lawrence: Kim, that'll have to be our last question. We're running out of time. Dave and I want to thank you for squeezing us in your very busy schedule.

Ms. Nelson: Well, thank you very much Paul and one final note. I just want to say October mark's Children's Health month. Children from the Environmental Protection Agency's prospective, are one of the most important parts of our population--they are our future. We recognize that as we look to the environment, we need to protect our children, they're our future.

With children's health month, I encourage every parent, every teacher and every child out there to better understand what the environment means to a growing child. So go to EPA's website and look for children's health and you'll see it right upfront and you got lots of great information about how you can help protect the children of the country.

Mr. Lawrence: Thank you Kim. This has been The Business of Government Hour featuring conversation with Kim Nelson, Assistant Administrator and Chief Information Officer of the Environmental Protection Agency. Be sure and visit us on the web at There you can learn more about our programs and research and get a transcript of today's fascinating conversation. Once again it's

This is Paul Lawrence, thank you for listening.

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