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Part II: Program Description and Performance Analysis

STRATEGIC GOAL 4: MANAGE RESOURCES TO IMPROVE PERFORMANCE

RATIONALE

ACF is committed to being a customer-focused, citizen-centered organization as it provides assistance to America’s most vulnerable populations. ACF has reached a critical point in its ability to manage a wide array of discretionary and mandatory programs. It is essential that the organization continue to manage resources to improve performance, provide high quality, cost-effective and efficient services, meet customers' needs and expectations, and use state-of-the-art information technology to improve management and data systems.

ACF's key management activities directly align with our commitment and efforts to "getting to green" under the five initiatives in the President's Management Agenda (PMA).

• Strategic Management of Human Capital: De-layering management levels to consolidate and streamline organizations, reshaping the organization and its workforce to meet a standard of excellence, and instituting a performance-based management strategy to cascade executive priorities to all employees and create accountability for organization success.


• Competitive Sourcing: Making greater use of performance-based contracts; expanding A-76 competitions and more accurate FAIR Act inventories.


• Improved Financial Performance: Achieving “clean” audit opinions throughout government and providing more accurate and timely financial information to secure the best performance and highest measure of accountability.


• Expanded Electronic Government: Expanding electronic Government applications and other E-Government services.


• Budget and Performance Integration: Making Government results-oriented – guided not by process but by performance.

The PMA outlines specific activities that must be completed in order for an Agency to reach the goal of "green" for each of these initiatives. The Office of Management and Budget (OMB) scores each Department's progress for each of the five initiatives and similarly, HHS scores each OPDIV's progress on a quarterly basis.

With the responsibility to administer some of this Nation’s most important social programs, ACF has a critical investment in our management and administrative infrastructure and in its capacity to continue to operative efficiently and effectively in this period of unprecedented fiscal austerity. Our efforts in this area are aimed at maintaining and even strengthening our ability to monitor and oversee our programmatic activities and to take advantage-in consonance with the Department-of enhancements made possible through information technology.

An increase of $12.3 million is requested for Federal Administration to maintain the current base staffing levels and related program management and support activities.

8.	ACHIEVE THE FIVE INITIATIVES IN THE PRESIDENT'S MANAGEMENT AGENDA

 

Approach to Strategic Objective: Unify systems, improve management of financial and physical assets, consolidate resources, eliminate duplication and restructure the workforce to streamline layers and provide enhanced, citizen-centered services.

PROGRAM DESCRIPTION AND CONTEXT

The President’s vision for government reform is guided by three principles. Government should be (a) citizen-centered, not bureaucracy-centered; (b) results-oriented; and (c) market-based, actively promoting rather than stifling innovation through competition. The President initiated five government-wide reforms in FY 2001 to improve the management of the Federal Government. As part of the PMA, ACF is working closely with HHS to implement the following reforms:

Strategic Management of Human Capital: De-layering management levels to streamline organizations and reshaping organizations to meet a standard of excellence.
Competitive Sourcing: Making greater use of performance-based contracts; expanding A-76 competitions and more accurate FAIR Act inventories.
Improved Financial Performance: Achieving “clean” audit opinions throughout government and providing more accurate and timely financial information to secure the best performance and highest measure of accountability.
Expanded Electronic Government: Expanding electronic Government applications and other E-Government services.
Budget and Performance Integration: Making Government results-oriented – guided not by process but by performance.

Program Partnerships

ACF has endeavored to embrace the principles of Performance Management through GPRA and other tools by reinventing the way it does business through enhanced partnership building, customer focus, and dedication to quality. Efforts in recent years include:

• Reducing ACF’s outstanding (one year and older) audit debt balance by $101,644,809 in FY 2003 (from ending year balance in FY 2002);
• Participating in HHS-wide task forces that contributed to a “clean” audit opinion on the FY 2003 HHS financial statements. These financial statements and opinion were delivered to OMB a full year prior to the FY 2004 government-wide mandated deadline;
• Promoting fiscal integrity and financial management accountability by establishing strong, collegial, cooperative relationships among program and/or staff managers and employees in ACF, the PSC, the ASBTF, Office of the General Counsel, Office of Inspector General, and the IPA audit firm in order to identify systems or procedural problems and establish and implement corrective actions as quickly as possible;
• Surveying partners and customers for assessment and guidance on the quality and appropriateness of ACF's services;
• Partnering with other Federal Agencies to support the Government-wide Federal
  Commons project where potential grantees will be able to apply for grant funds through a single portal on the Internet in the future; and
• Establishing a presence on the World Wide Web;
• Investing in internal systems improvement and technology so that current and potential ACF grantees can apply for grant funds over the Internet through On-line Data Collection;
• Developing an ACF Work force Restructuring Plan based on the goals of the PMA and in support of the Department’s management initiatives;
• Establishing performance contracts between the Assistant Secretary and ACF senior staff that include annual performance targets and the Department’s response to the PMA, as well as the Assistant Secretary’s priorities for the agency;
• Reinventing the regional office structure to locate resources where partners most need them;
• Developing and implementing diversity and minority initiatives that allow for alignment of the work force with the goals and priorities and help ACF achieve its diversity objectives that reflect all groups including the most under-represented populations;
• Establishing a successful labor-management cooperative agreement with the National Treasury Employees Union (which represents the bargaining unit);
• Investing in technology such as videoconferencing equipment and satellite linkages to bring central office, regional offices and partners closer together and to save on travel costs; and
• Partnering with the Veterans Administration and Department of Defense to operate the Public Assistance Reporting Information System.

PROGRAM PERFORMANCE ANALYSIS

Program Performance Table

Performance Measures	Targets	Actual Performance	Reference (Relevant strategic goal in the HHS Strategic Plan)
8.1 Obtain a ‘Green’ score for each initiative under the PMA.[O]	FY 05: 5 FY 04: 5	FY 05: FY 04:	HHS 8
8.1a. Each ACF staff member participates in at least one developmental learning opportunity to enhance his/her skills and productivity,	FY 04: Replaced FY 03: 80%	FY 03: 3/04 FY 02: 97% (baseline)	HHS 8
9.1a. Decrease ACF’s manager-to-staff ratio [E]	FY 04: Replaced FY 03: 1:5	FY 03: 1:6.5 FY 02: 1:5 (baseline)	HHS 8 EFFICIENCY MEASURE
10.1a.1 Implement a funds planning capability to manage and track all grant funds and planning mechanization.	FY 04: Replaced		HHS 8
10.1a.2 Operate and maintain the On-line Data Collection system (OLDC), which will capture and validate grant information submitted by grantees using the Web.	FY 03: OLDC	FY 03: Completed production version.	HHS 8
11.1a. Obtain a clean audit opinion for ACF.	FY 04: Replaced FY 03: NA FY 02: Clean Opinion	FY 03: NA* FY 02: Clean Opinion	HHS 8
Total Funding (dollars in millions) See detailed Budget Linkage Table in Appendix A-12 for line items included in funding totals.	FY 05: $193.3 FY 04: $181.0 FY 03: $173.4 FY 02: $173.0 FY 01: $173.2 FY 00: $147.8 FY 99: $144.5
* Goal 11.1a is not applicable in FY 2003 since ACF will no longer have an independent audit of its financial statements nor receive a separate CFO audit opinion. ACF financial data was included in the HHS audited financial statements; the HHS financial statements received a “clean” opinion for FY 2003. (back)

 

Summary of Program Performance

The four objectives and measures 8.1a-11.1a (develop and retain a highly skilled, strongly motivated staff; streamline ACF organizational layers; improve automated data and management systems; and ensure financial management accountability) have been replaced by a single "getting to green" measure.

Measure by Measure Presentation of Performance

8.1a	Each ACF staff member participates in at least one developmental learning opportunity to enhance his/her skills and productivity. Data Source: Administrative Records

ACF has successfully managed the agency’s human capital and implemented human capital reforms in support of HHS initiatives and the PMA. Despite the dramatic decrease of resources and substantial increase in programmatic responsibilities, ACF continues to succeed in meeting human capital and mission-critical objectives. This objective has been tracked since FY 2000. For many years, ACF has confronted shrinking staff levels, resources and a loss of knowledge and skills due to attrition and separations, and an aging workforce (three-quarters are eligible to retire by 2006). To address these issues, ACF is building upon a culture of continuous learning and developing an agency training strategy that provides training and developmental learning opportunities to enhance skills and productivity. ACF has implemented a new performance system that includes a standard element requiring a professional development plan for each employee that encourages the use of a learning action plan to identify needed competencies. ACF is addressing the needs of the existing staff and new hires by offering developmental opportunities to support restructuring and redeployment of staff in mission-critical positions, while supporting a diversity and minority initiative to ensure that ACF’s workforce reflects all groups, including the most under-represented populations. ACF’s aim is to build, sustain, and effectively deploy a skilled, knowledgeable, diverse, high-performing, technologically advanced workforce to meet the current and emerging needs of the government and the public.

During FY 2003, ACF has sought to ensure that at least 80 percent of all staff participates in at least one developmental learning opportunity to enhance their skills and productivity. ACF expects to receive the final participation rates for FY 2003 during March 2004. Providing a wide range of learning opportunities that accommodate diverse adult learning styles is critical to ensure that staff possess the skills and competencies needed for the demands of a changing workplace and to successfully achieve the agency’s mission, Departmental goals, and the PMA.

ACF has been a leader in providing a diverse and rich curriculum of professional and business development as well as technical online learning opportunities available to all staff. During FY 2003, ACF Federal staff continued to have access to more than 800 technical courses available from commercial vendors through the Department’s DL/net Learning Portal.

ACF’s strategic planning for staff development has utilized an integrated, comprehensive learning approach for staff training and career development. This approach has provided both employees and those in management positions with the flexibility to build employee knowledge, skills, and competencies. Throughout FY 2003, ACF has built its training and learning agenda around specific quarterly themes, each targeting specific competencies critical to improved workplace performance and outcomes. These themes included: professional communications (oral/written, presentation skills, customer communications), building coalitions (partnering/collaboration, negotiating/influencing, meeting skills), and navigating change (flexibility, adaptability, managing stress in a changing workplace).

9.1a	Decrease ACF's manager-to-staff ratio. Data Source: Administrative Records

ACF has succeeded in reducing the manager-to-staff ratio from 1:5 to 1:6.5. Reorganizations and realignments have helped reduce managerial layers, streamlined management functions, eliminated redundant supervisory chains and increased organizational efficiency. In addition to the strategic approaches outlined above, ACF is utilizing flexible personnel programs, staff redeployments/reassignments and limited new hires and promotions as a means to further reduce the manager-to-staff ratio.

10.1a1

Operate and maintain the On-line Data Collection system (OLDC) which will capture and validate grant information submitted by grantees using the web. Data Source: Administrative Records

Historically, ACF processed grants using more than 30 separate computer programs (application systems). As the result of a FY 1993 ACF reengineering initiative culminating in a FY 1994 report, ACF established a systems re-engineering team to develop an integrated system--the Grants Administration, Tracking and Evaluation System (GATES)--designed to support decision-making and accountability in a decentralized environment. This project targeted the replacement of the more than 30 incompatible, outmoded legacy systems operating on a variety of platforms supporting grants administration. GATES, a comprehensive system for electronic grants processing, has benefited grantees by providing more timely and efficient grants processing, more accurate data, less down time and quicker start-up.

ACF is implementing the next generation of electronic grant-making using an “On-line Data Collection (OLDC) Initiative" to enable grantees and potential grantees to submit the required information over the Internet. Plans have been presented to the Information Technology Review Board (ITRB) consistent with the new Government Paperwork Elimination Act. Synchronization of the databases between OLDC and GATES is proving to be difficult and is requiring extensive testing efforts. ACF is testing an interface between OLDC and GATES and the Grants.gov government-wide e-grants portal project that HHS is managing.

ACF is developing a funds-planning component in GATES to enable management to effectively plan, monitor, and manage grant expenditures. The first module – for managing Head Start grants – was fully operational by the end of FY 2003.

ACF is maintaining and enhancing its Enterprise Architecture describing the business processes, rules, information needs and flows, users, and locations that will enable ACF managers to obtain the right information at the right time to make a difference in their program performance. The implementation and maintenance of Enterprise Architecture is a basic tenet of effective information technology management.

ACF also supports the Department’s Consortium for Information Technology (IT) Consolidation as the foundation for more efficient government operations. Estimates of FTE and contractor savings are now being developed and, depending on the alternative selected, may include competitive sourcing of some of the IT functions. ACF has also consolidated IT functions in its regional offices, resulting in the redeployment of eight FTE to critical program assignments. Two additional ACF IT staff are working on the development of the Department-wide UFMS system and the Enterprise Human Resources and Payroll System.

11.1a

Obtain a clean audit opinion for ACF. Data Source: ACF Audit Report

ACF received a “clean” or unqualified opinion from the auditors for FY 1999-2002--a major accomplishment that has contributed significantly to the Department’s clean audit opinions. Based on the collaborative efforts among managers and staff in HHS, the PSC, ACF and the auditors over the last few years, our financial systems, services and reporting capabilities have improved and ACF’s FY 2002 clean audit opinion without any material weaknesses was achieved. ACF’s FY 2002 audit was completed and submitted in January 2003 allowing the Department to meet the OMB required submission of the Departmental audit opinion and Performance and Accountability Report in February 2003.

We will not be reporting on this performance measure since ACF no longer is required to have a stand-alone audit of its financial statements for FY 2003. ACF is actively participating in the Departmental task force designed to examine methods for meeting the FY 2003 audit deadline of November 15, 2003.

ACF financial data was included in the HHS consolidated financial statements for FY 2003. The HHS consolidated financial statements received a clean opinion.

PROGRAM GOAL: Successfully implementing the President's Management Agenda

To highlight our efforts and accomplishments in striving to achieve an all “green” scorecard under the PMA, we have combined the four FY 2004 objectives and measures into one objective and measure “getting to green” with a single target: "obtain a green score" for each initiative under the PMA. Our target (green) and our performance (red, yellow or green) for each of the five initiatives will indicate annual progress toward achieving the ultimate goal of “green” (completion of all activities under the five initiatives in the PMA.) ACF has made progress over the past year toward completing many of these activities. We routinely discuss the performance of each initiative using a scorecard indicating the quarterly and annual rating.

"Getting to green"
Data Source: HHS Scorecard

For FY 2003, we achieved a score of “green” for our progress in each of the five initiatives. An explanation of ACF’s strategy and performance under each of the PMA initiatives is described in greater detail under the “Program Performance Analysis” section.

1) Strategic Management of Human Capital

“We must have a Government that thinks differently, so we need to recruit talented and imaginative people to the public service. We can do this by reforming the civil service with a few simple measures. We’ll establish a meaningful system to measure performance. Create awards for employees who surpass expectations Tie pay increases to results. With a system of rewards and accountability, we can promote a culture of achievement throughout the Federal Government.” Governor George W. Bush

ACF has undertaken the following steps in order to accomplish our mission despite dwindling staffing and fiscal resources:

• Consolidated administrative management functions in the areas of grants management, information technology, human resources and facilities management resulting in the elimination of duplicative services and achieving economies of scale;
• Restructured and realigned multiple program and staff offices to reduce the numbers and levels or reporting layers, increase the number of staff in direct service positions and achieve greater organizational efficiency;
• Instituted a performance-based management strategy for all employees to create accountability for realizing agency mission, goals and objectives; and
• Strengthened workforce planning in the areas of hiring, recruitment, retention and succession planning by linking planning efforts to the accomplishment of the agency’s mission.

ACF FY 2003 President’s Management Agenda Scorecards

	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter
Strategic Management of Human Capital	Green	Green	Green	Green

For our efforts, the Department assigned a “green” rating to ACF for this goal for each quarter of FY 2003.

Administrative Consolidation: In support of the HHS initiative to eliminate duplication in administrative management areas and control FTE growth, ACF committed to reduce 45 FTE across the agency in administrative positions by October 2003. ACF exceeded its targeted reductions, achieving 65 administrative FTE reductions as of June 2003. We achieved these reductions through attrition (including regular and early retirement as well as non-retirement separations), without backfilling and without involuntarily separating any employees from the agency.

ACF consolidated functions in the areas of administrative management, grants administration, information technology and personnel services. We redeployed a total of 43 employees from administrative management areas—23 to priority program areas and 20 to centralized administrative functions. We consolidated all of the agency’s grants functions from five separate grant offices into a single office within the Office of Administration (OA) and consolidated regional Information Technology (IT) network services from the ten regional offices into a centralized location in OA. Additionally, we expanded an existing service agreement with the Program Support Center (PSC), to provide the agency’s personnel security clearance processing and labor/employee relations services in addition to the range of personnel services provided by the PSC since 1993. This expanded the agreement enabled us to redeploy staff to critical priority areas.

De-layering: ACF reorganized several of our program and staff offices to create a flatter, more accountable and citizen-centered organization. We reorganized the Administration on Developmental Disabilities by eliminating two management positions and utilizing team leaders in front-line positions to more efficiently meet current and emerging program objectives. We realigned the Head Start Bureau by merging two existing branches resulting in a flattened organizational structure and more effective use of limited staffing resources. We realigned functions within the Office of Administration resulting in the consolidation of two divisions within its Office of Financial Services and consolidated research functions from the Administration on Children Youth and Families to the Office of Planning, Research and Evaluation, eliminating duplication and streamlining the management of research functions. We realigned the Office of Child Support Enforcement to eliminate unnecessary supervisory layers and reorganized the Office of Refugee Resettlement resulting in greater programmatic consistency and parallel operating processes. Finally, we eliminated a management layer for half of the agency’s workforce by eliminating ACF’s regional hub structure.

Accountability: In order to ensure an agency-wide system of accountability, ACF has taken steps to (1) clearly communicate to all employees’ performance expectations, goals and objectives as they relate to mission accomplishment; (2) establish performance standards and a mechanism for measuring and evaluating performance on those standards; (3) reward positive performance and identify and address performance concern; and (4) institutionalize a method of cascading agency performance goals to all employees. ACF has developed performance contracts for all senior executives. These contracts are linked to the Assistant Secretary’s performance contract with Secretary Thompson.

In order to communicate performance and accountability expectations, ACF held several training and information sessions with managers and employees in all headquarters and regional offices. These sessions clarified employee, supervisory and managerial roles and responsibilities in the performance planning process and included the discussion of strategies for monitoring and improving performance with an emphasis on performance expectations.

Strategic Workforce Planning: ACF conducted strategic analyses of its workforce including analyzing workforce demographics and trends, assessing changes in the workforce and workforce needs, and evaluating critical competencies and skills required to fulfill the agency’s mission. Building upon these analyses, ACF linked its hiring and succession plans to the agency’s workforce and restructuring plans. Through training sessions and mentoring initiatives, ACF is focusing its efforts on ensuring the transfer of historical knowledge and expertise from long-term employees to newer employees. In order to recruit and retain critical talent in the face of the impending retirement wave, ACF developed a recruitment and retention plan that corresponds with HHS recruitment and retention objectives.

ACF is using a strategy of limited hiring and promotions, strategic employee redeployments and reassignments, flexible personnel programs and coordinated workforce, and succession and hiring planning to meet hiring needs. ACF assesses each employee separation from the agency to determine whether the position/function supports priority work or if the function can be assumed by another employee. On a limited basis, ACF back-fills positions and uses new hires when there is no other alternative to do critical program functions and meet mission objectives. ACF uses flexible personnel programs such as the Presidential Management Intern (PMI) program and the Emerging Leader program to attract new, highly skilled/motivated professional staff. In FY 2002, ACF was granted Voluntary Early Retirement Authority (VERA) and offered VERA in an effort to further reduce the numbers of employees in duplicative administrative management positions. Twelve employees retired in non-administrative areas under VERA; ACF back-filled the positions through reassignment rather than recruitment.

In addition, in late FY 2003 ACF embarked on two intensive studies which will contribute to its strategic workforce planning. One of these is a study of Information Technology ACF-wide, the initial focus of which is to inventory IT-related positions throughout ACF and the Federal and contractor positions associated with them. After inventorying, we will assess where there are redundancies and/or opportunities for improvements in effectiveness and efficiency. The other study is an in-depth organizational analysis of various components within ACF. This study will concentrate on such issues as sufficiency of resources and appropriate staffing models for those components.

2. Competitive Sourcing

“Government should be market-based – we should not be afraid of competition, innovation, and choice. I will open government to the discipline of competition.” Governor George W. Bush

 

To achieve efficient and effective competition between public and private sources, the Administration simplified and improved procedures for evaluating public and private sources; publicizing activities subject to competition and ensuring senior level agency attention to promoting competition.

ACF’s PMA Competitive Sourcing initiative is linked and integrated with other ACF PMA initiatives. This is particularly true for the “Strategic Management of Human Capital.” ACF has aligned its Competitive Sourcing Plan with human capital workforce re-structuring objectives by targeting administrative management positions for cost comparisons and direct conversions. It is expected that benefits will accrue to the agency from the collaborative efforts of staff working on these two closely related initiatives.

ACF FY 2003 President’s Management Agenda Scorecards

	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter
Competitive Sourcing	Green	Green	Green	Green

 

In FY 2003, ACF met this goal, the first HHS OPDIV to do so, either through outsourcing or analyzing positions for possible outsourcing. Fifteen percent of its positions identified as commercial were either directly converted to contractor support or competed for possible conversion. ACF received a “green” for this PMA initiative during FY 2003. ACF’s progress is in large part due to the rigor with which ACF completed the FAIR Act inventory. This thorough and aggressive re-evaluation will assist us in achieving the FY 2004 and 2005 goals.

ACF contracts out several major activities to private vendors and the PSC: (IT) help desk support; human resources functions (personnel, employee relations, employee assistance and select EEO activities such as investigations, counseling, court reporting services); select administrative support services (records management, personal property management, mail, transportation, incidental labor, management of employee transit benefits and space management); acquisitions management (procurements, travel card and purchase card programs); and select financial services (in some ACF components, aspects of the grants process, including intake and review of applications).

As a result of ACF’s comprehensive approach to the FAIR Act inventory, we had a dramatic increase in the number of positions identified as commercial—380 positions are identified as commercial and 1136 are designated inherently governmental. This is a 21 percent increase in the number identified as commercial and a 38 percent increase in those identified as commercial and not specifically exempted from competition by the agency. Additionally, ACF worked with the Administration on Aging staff to complete the FAIR Act inventories, helping make the two agencies’ designations more consistent and furthering the goal of “One HHS.”

ACF has also initiated a study which will contribute to our Competitive Sourcing efforts in 2004 and beyond. The purpose of this study is to identify and, to the extent possible, quantify criteria to be used in analyzing ACF functions to determine their attractiveness for competitive sourcing. It is anticipated that these more objective criteria will result in improved future decisions regarding which functions to competitively source.

3. Improved Financial Performance

The expected results of this PMA reform: • More accurate benefit and assistance payments to current recipients will enable programs to serve additional eligible recipients without increasing their budgets and will reduce program costs. • Improved accountability to the American people through audited financial reports.     > Financial systems that routinely produce information that is:       - timely, to measure and effect performance immediately;       - useful, to make more informed operational and investing decisions; and       - reliable, to ensure consistent and comparable trend analysis over time and to facilitate better performance measurement and decision making.       Source: PMA

 

ACF is working with the Department to improve financial performance in the five areas that support the PMA: erroneous payments, financial management improvement, financial systems, accountability, and integrate financial and performance management systems.

ACF FY 2003 President’s Management Agenda Scorecards

	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter
Improved Financial Performance	Yellow	Green	Green	Green

 

The Department has recognized ACF’s progress during FY 2003 by upgrading ACF’s rating from a “yellow” in this area for the first quarter to a “green” for the subsequent quarters. The “green”score on this PMA initiative is attained by meeting or exceeding all of the individual activities in each of five areas: erroneous payments, financial management improvement, financial systems, accountability, and integrate financial and performance management systems.

Erroneous Payments - In January 2003, HHS received OMB’s Erroneous Payments Management Plan Agreement for Implementing the PMA in FY 2003. This Management Agreement included deliverables for developing and measuring error rates in the TANF, Foster Care, and Head Start programs. Deadlines for some deliverables began in FY 2003, while others continue through March 2005. ACF submitted the following deliverables to OMB on time or ahead of schedule: proposed methodologies for establishing error rates and cash benefit error rate measurements under Foster Care and TANF; a training plan for Head Start staff involved in measuring error rates; legislative changes to authorize collection of data for determining state error rates under TANF (agreement was later reached not to pursue this strategy); and a legislative proposal to allow for disallowances based on initial error rates under Foster Care (agreement was later reached not to pursue this strategy). In July 2003, HHS, ACF, and OMB officials discussed a proposed strategy for erroneous payment activities in the Child Care program which resulted in OMB approving ACF’s concept for a pilot whose purpose would be to begin describing and defining the problem of child care erroneous payments with a few volunteer states expanding to other States later. Throughout FY 2003, HHS, ACF, OIG, and OMB officials held a series of meetings to discuss deliverables, as well as challenges and new strategies for establishing error rates in the four programs. All parties agreed to modify deliverables/deadlines (and to add deliverables for Child Care) for the FY 2004 Management Agreement finalized in December 2003.

During FY 2002 (and prior to the OMB Management Plan Agreement), HHS, ACF, and OMB financial managers collaborated with appropriate ACF program officials to develop an Erroneous Payment “Risk Assessment” plan for identifying and helping reduce erroneous payments in four programs: Foster Care, TANF, Head Start, and Child Care. ACF established a team to conduct reviews and prepare reports addressing findings from the statewide (A-133) audits for the four relevant programs. The reports for Foster Care, TANF, and Head Start were submitted to HHS and OMB September 2002; Child Care was submitted to HHS in March 2003. Although the reviews/reports did not result in the identification of systemic problems or trends concerning erroneous payments, OMB officials expressed concerns that ACF’s four designated programs did not have established error rates which resulted in the development of the Management Plan Agreement.

Another activity used to promote the identification and reduction of erroneous payments is the Public Assistance Reporting Information System (PARIS) project. PARIS is a voluntary program for States willing to share public assistance data among themselves for the purposes of maintaining program integrity and detecting and deterring erroneous payments. As an example, Pennsylvania, using FY 2000 match data, determined an annualized savings of $6,578,661 within the TANF, General Assistance, Food Stamps, Social Security Supplemental, and Medical Assistance programs. Current effectiveness of PARIS is difficult to determine since 1) the program is voluntary, 2) not all states participate, and 3) there is no requirement that any data be collected on the cost or benefit of participating. Twenty-eight states had signed agreements under the former PARIS agreements; ACF is obtaining signatures under the new agreements. ACF continues to explore ways to encourage more states to participate, including the possibility of OMB providing some funding for PARIS related activities in the FY 2005 budget.

Financial Management Improvement – To implement a credible and auditable method which fulfills the full cost accounting requirements for the FY 1998 (and future audits), ACF allocated its Federal Administration budget indirect costs proportionately among the GPRA major program areas on the basis of direct FTE’s (indirect costs include salaries and benefits for staff not working directly on one of the 14 program activities; costs of training, personnel, budget, travel, systems, facilities, supplies and rent.) To accomplish this, ACF senior staff in headquarters and the regions completed a Staff Resource Survey providing the total number of staff working directly on program activities in one or more of the major program areas as well as the total number of staff not working directly on program activities.

The Statement of Net Costs included completed survey data, collated and analyzed in an automated spreadsheet. This Statement was provided to PSC identifying indirect costs in proportion to the direct staff ratio. ACF’s cost accounting strategy was accepted by the auditing firm, PSC, ASBTF and the OIG. ACF continues to use this strategy for each audit cycle, adding new program areas as appropriate.

Financial Systems - In June 2001, the Secretary of HHS introduced his “One Department” vision that “HHS shall have an integrated Department-wide financial system that consistently produces relevant, reliable and timely financial information to support decision-making and cost-effective business operations at all levels throughout the Department” initiating the Unified Financial Management System (UFMS).

The UFMS system is being designed to:

• lower administrative costs, freeing up resources for programs,
• provide a more secure systems environment,
• provide capability for more timely and accurate information for management purposes,
• standardize and streamline processes/procedures across HHS,
• eliminate redundant systems and databases,
• update financial records in near real-time, and
• improve ad-hoc reporting capability.

UFMS will help ACF access the type of data needed for managers to determine which resources have the greatest impact on our client populations. While ACF produced its financial statements which were audited in compliance with established Departmental deadlines, this process has been labor intensive lacking the necessary resources for financial analysis. The UFMS initiative will address this need for an automated financial statement generation process. ACF is scheduled for full implementation of UFMS in FY 2006.

ACF actively participated on the UFMS Steering Committee, the UFMS Planning and
Development Committee, the UFMS Policy Workforce, and the UFMS Change Control Board. ACF contributed significant funding to this project and it is likely that additional costs related to reprogramming the Grants Administration Tracking Evaluation System (GATES) to interface with UFMS will be required.

As part of the Secretary’s “One Department” vision, the GATES system was selected as one of only two grants management systems to be maintained within the Department. This consolidation of grants management systems will reduce the number of systems within the Department from 9 to 2 and should result in certain efficiencies and economies of scale.

Integrate Financial and Performance Management Systems -The first step in integrating financial and performance data is to train staff on the availability and usefulness of existing data. As in many Federal agencies, ACF’s financial management staff is broadly comprised of several different functional areas, i.e., program, financial, budget, and performance management staff. The PMA initiative indirectly requires that these three groups of individuals learn to understand and effectively communicate with each other to achieve their agency’s mission and to better serve their client populations.

The Chief Financial Officer’s (CFO) staff discussed the content and interpretation of financial statements (in particular the Statement of Net Cost) with several program offices within ACF. The Statement of Net Cost aggregates program expenses by ACF’s 14 GPRA programs (an aggregation of approximately 60 budget activities). The Statement of Net Cost is presented in a meaningful format (including the separate budget activities) assisting managers to determine where resources can have the greatest impact on programs and client populations. ACF created a Financial Statement Analytical Review policy that assists financial and program managers in determining the reasonableness of the financial statements. This policy has been forwarded to other HHS operating agencies to assist them in conducting analyses.

ACF is establishing a Funds Planning Module that will allow grants and program management staff to forecast and administer Federal funds through a comprehensive system. This module will permit the planning and tracking of ACF program and S&E funds over several different categories, provide for comprehensive on-demand reporting, and will give managers a useful tool for estimating and adjusting their fiscal year funding needs. It allows meaningful comparisons of funding plans to actual obligations, adding another tool for program managers to assess program performance.

Accountability – Federal agencies’ financial statements are audited to assure that they fairly and accurately represent the agency’s financial condition. The PMA charged all 24 cabinet level departments to have approved audits during the FY 2002 audit cycle.

For the FY 2004 audit cycle (and future audits), Federal agencies are required to complete their audited financial statements and opinions and submit their Program and Accountability Reports by November 2004. To assure that HHS can accomplish the deadline for the FY 2004 audit cycle, the Department piloted a shorter audit cycle for the FY 2003 audit process. Because ACF is not required to have a stand-alone audit of its financial statements, this activity will be consolidated with other HHS operating agencies for audit.

ACF financial data was included in the HHS consolidated financial statements for FY 2003; the HHS consolidated financial statements received a clean opinion.

4. Expanded Electronic Government

The expected results of the PMA reform: “By improving information-technology management, simplifying business processes, and unifying information flows across lines of business agencies will: • provide high quality customer service… • reduce expense and difficulty in doing business with the government; • cut government operating costs; • provide citizens with readier access to government services; • increase access for persons with disabilities to agency Websites and E-government applications, and • make government more transparent and accountable.”       Source: PMA

 

The PMA includes a number of activities in the expansion of the electronic government initiative: IT infrastructure consolidation, large agency consolidation, enterprise IT projects, specific E-government actions, and IT budgets. Although ACF does not have the lead for projects of these specific E-Government actions, ACF has several projects that contribute to the Departmental initiative, e.g. the expansion of electronic government through its automated information system. These include First Gov, Web Portal, IT consolidation, On-Line Data Collections, and Public Key Infrastructure initiatives. ACF participates in FirstGov.gov Website by making information, services, and software available to the public. Currently, there are 15 major ACF programs represented on this Website.

ACF FY 2003 President’s Management Agenda Scorecards

	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter
Expanded Electronic Government	Yellow	Green	Green	Green

 

Secretary Thompson’s Five-Year Strategic IT Plan includes an E-Grants initiative to consolidate HHS grant processes by allowing applicants to apply for Federal grants through a simplified and unified E-Grants environment. ACF has developed a standard program announcement template to enhance ACF’s compliance with Departmental policy and foster greater uniformity and accountability. This template fully integrates the data elements of OMB, FedBizOpps, the Department’s policy and ACF’s grant policy. This consolidation has significantly reduced staff time involved in the program announcement review process and, most importantly, has provided consistency of format and guidance that applicants receive when responding to ACF program announcements.

ACF is supporting this initiative by coordinating its GATES and Websites support activities with the development and implementation of the E-Grants initiative, since renamed Grants.gov. ACF is implementing its On-Line Data Collection system to meet the requirements of the Government Paperwork Reduction Act, enabling citizens to submit all required textual documents electronically using the Internet.

5) Budget and Performance Integration

“Government should be results-oriented – guided not by process but guided by performance. There comes a time when every program must be judged either a success or a failure Where we find success, we should repeat it, share it, and make it standard. And where we find failure, we must call it by its name. Government action that fails in its purpose must be reformed or ended.” -Governor George W. Bush

 

ACF is committed to integrating performance information into its processes of budget decision-making. Under ACF’s integrated approach, more than sixty line-item programs have been aggregated and consolidated into fourteen broad program activity areas. These various program activity line items are aligned with the corresponding strategic goals and objectives, enabling ACF to associate investments with specific achievements.

ACF continues to include a budget-performance crosswalk linking budget activities (budget line items and program accounts) with specific performance goals, objectives and representative targets. The budget crosswalk is a program-based account structure that allows ACF to assign resources to the agency’s strategic goals based on the activities of the program line item. In the budget justifications, the budget narrative is consistent with the goals and objectives of the performance plan. It includes information on which strategic goal(s) each budget line item supports and includes selected performance measures in the budget narratives.

ACF is implementing performance-based budgeting by highlighting the relationships between resource investments and activities at the program level and outcomes achieved by these activities in the longer term. ACF programs have developed performance plans and reports that make a clearer connection between requested budgetary resources, planned activities and projected performance targets in the narrative sections. Each program section includes a table that links investments to activities and outcomes. This effort lays the groundwork for informing more effective, efficient decisions for resource allocation; improving internal management; and providing greater accountability through more integrated financial and performance reporting.

ACF FY 2003 President’s Management Agenda Scorecards

	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter
Budget and Performance Integration	Green	Green	Green	Green

 

The Department has given ACF a ‘green’ rating in this area based on ACF’s submission of a timely and accurate FY 2004 Performance Plan to OMB and Congress.

HHS provides support to OPDIVs selected to participate in the Program Assessment Rating Tool (PART). The PART process is an important step in conducting candid, systematic assessments of Federal programs. Three ACF programs (Head Start, Foster Care, and Refugee Resettlement) were selected to participate in the PART effort last year. Five additional programs were assessed this year: Child Support Enforcement, Community Services Block Grant, Low-Income Home Energy Assistance, Foster Care, and Developmental Disabilities. The scores are presented along with the respective program presentations in the FY 2005 budget request.

Consistent with the PMA and OMB/HHS guidance, ACF’s FY 2005 Annual Performance Plan reflects the following improvements: (1) increasing the number of outcome measures while reducing the number of performance measures overall (60 measures for FY 2005 compared to the initial submission of 68 measures in FY 2004), and (2) aligning funding with GPRA program activities.

 

 

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