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Successes and Continued Progress Towards Implementation of the Government Performance and Results Act (GPRA)

Introduction

Mr. Chairman and members of the Subcommittee, on behalf of the Nuclear Regulatory Commission, I welcome the opportunity to testify today on our successes and continued progress towards implementation of the Government Performance and Results Act (GPRA). My specific focus is in the area of performance budgeting. NRC's progress has been recognized by the General Accounting Office (GAO) as positive and significant. I am pleased to provide you with a description of our efforts to date, as well as, address some important challenges for future consideration. Let me first note that a major factor in our success has been the strong support exhibited by the Commission for transitioning the agency to a more performance based organization. Their support has been valuable in moving forward.

The foundation of NRC's effort to implement GPRA is the recent implementation of an integrated planning, budgeting, and performance management (PBPM) process in which "programs follow policy and dollars follow programs". The result has been the establishment of: (1) a sensible, reliable process for defining agency goals and establishing strategic direction; (2) cost effective strategies for achieving those goals; (3) the ability to determine the resources needed to achieve the goals; and (4) the ability to measure and assess our progress and overall performance. (A graphic that depicts the components of the PBPM process is provided at the end of my testimony.) A recent contractor evaluation of the NRC's PBPM process found this process is sound and that it has been the catalyst for improving our integrated planning process, consistent with the intent of GPRA. Thus far, we have applied this process to produce the NRC's FY 1999 Performance Plan and its FY 2000 Performance Plan and budget. We are also applying this approach in revising our Strategic Plan.

FY 1999 and FY 2000 Budget and Performance Plan

A key strategy that we have used to transition to a more performance based agency is to integrate the various components of planning and budgeting. The recently issued GAO report (GAO/AIMD/GGD-99-67) on performance budgeting recognized our progress in FY 1999 in linking our allocated funding to our strategic goals. We also agree with GAO's findings that the following three approaches facilitate linking budget requests to anticipated results: (1) change program structures to reflect goal structures; (2) show simple, clear relationships between program activities and performance goals; and (3) fully integrate performance plans into Congressional budget justifications.

The FY 1999 performance plan, the first NRC performance plan, encompassed two of the three approaches. First, the NRC substantially changed its program activity structures to be consistent with its planning structures. During development of our strategic plan, we identified strategic arenas which comprised our major mission responsibilities. Funding for programs was identified for each strategic arena which corresponded to a specific strategic goal and associated performance measures. This represented our initial steps to transition from an organizational budget that emphasizes individual office outputs to a more performance based budget that emphasizes agency-wide programs and integration of office activities that support specific mission accomplishments.

With respect to the second approach of establishing a simple relationship between program activities and performance goals, we created a relationship by linking a single program activity with multiple performance goals. Using the "one-to-many" approach, NRC linked all of its program activities to its strategic goals.

We did not fully integrate performance information with the budget justification in NRC's FY 1999 performance plan, but we have for FY 2000 where we combined the performance plan and the budget. This improvement contributed to the integration of planning and budgeting functions within the NRC. At the same time, this communicated a more complete picture to our stakeholders of what actions the agency was planning to take and the resources needed to get the job done. Consistent with GAO's observations on the FY 2000 Performance Plan, NRC had improved its discussion of its strategies and resources to achieve its goals, and agency programs were aligned with specific strategies to achieve specific strategic goals and associated performance measures. However, we did not establish the relationship of agency programs and activities to performance goals in the plan. We are improving this area as part of the FY 2001 budget and performance plan.

While it is clear the NRC is moving in the right direction, we recognize that we are not yet where we need to be. We need to evolve into an organization that establishes the optimum mix of efficiencies and effectiveness by being able to clearly articulate that we are doing the right work and we are doing it right. I will now discuss some of the more significant undertakings during the past year, since completing our integrated FY 2000 budget and performance plan.

FY 2001 Budget and Performance Plan

During the past 18 months, the NRC has taken additional actions to support our continued conversion to a more performance-based organization. We used a contractor to help us focus on the planning and budget components of the PBPM process. The results are being included in the FY 2001 Budget and Performance Plan to be submitted to Congress early next year.

Improving the use of outcomes in deciding which programs to pursue and subsequently in allocating resources has been an agency priority. While we are not able to create a direct mathematical relationship to calculate the change in outcomes relative to an incremental change in resources, we were able to rank activities relative to their contributions to performance outcomes. To date, an application of this process has been in our Office of Nuclear Reactor Regulation, which is responsible for oversight of nuclear reactors. Implementation of this process included identifying desired outcomes. The degree of change associated with the desired outcomes was established to facilitate a clearer understanding of how much work is required to meet desired outcomes. Proposed and existing work were evaluated in terms of how they leveraged the outcomes. This enabled identification of the activities and initiatives with the highest positive impact on desired outcomes, leading to a better understanding of contributions to outcome goals. By linking key activities and specific performance goals and then judging the relative contributions to the outcomes of various activities, our budget process included substantive discussions about outcomes, and how activities could be used to leverage those outcomes necessary to achieve our performance goals. We used this approach to identify new initiatives, determine work that could be eliminated without impacting outcomes, and identify work that should be continued because of its contribution to outcomes.

We are currently revising our strategic plan. Our goal is to revise the strategic plan by identifying performance goals that more directly relate to what the agency wants to achieve and how the agency will be managed, identifying key strategies for achieving each performance goal, and identifying performance measures that demonstrate our progress in achieving each performance goal. The challenge, especially for a regulatory agency like the NRC, is to find the right balance between information related to our own performance and operations, and information on the industry we regulate that will ultimately guide management decisions for needed changes and adjustments. Inherent in that challenge is the need to verify and validate, on a sound sampling and auditing basis, information generated by the industry we regulate and by ourselves to make sure that we are collecting accurate and complete information.

The NRC intends to continue to provide Congress with an integrated budget and performance plan. We will continue to use the concepts associated with performance budgeting to help make informed choices. GPRA requires that the FY 1999 Performance Report be submitted to Congress 6 months after the end of the fiscal year. The Office of Management and Budget's initial draft guidance allows the agencies to choose from several reporting options: a stand alone report; combining the report with the Accountability Report; combining the report with the Performance Plan; or combining the report with the Congressional budget request. We are currently reviewing these options to determine how best to integrate performance reporting with performance planning and budgeting.

Conclusion

In conclusion, we are making progress in performance budgeting and have experienced some valuable lessons. The transition to a performance based organization is an iterative process that requires our continued attention to managing towards outcomes. This transition will continue during the next 3-5 years. We look forward to working with the Congress including this Subcommittee, the Office of Management and Budget, and the General Accounting Office, in the year ahead. Thank you for the opportunity to summarize the status of our performance budgeting efforts. I would be happy to answer your questions at this time.

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