FY 2009 Financial and Performance Reports

If a tree falls in a forest, did it make a sound?

The November 15^th release of federal department and agency annual performance and accountability reports went largely un-noticed. Not a mention in the New York Times, Wall Street Journal or Washington Post (even its Federal Page).

With so much attention to transparency and accountability – does no one care? Or, are these reports written in such length and technical prose that no average citizen would want to read them? According to a survey conducted by the Association of Government Accountants of 239 financial management executives across government: “The current financial reporting model costs too much and delivers little useful information to government decision-makers”

Performance and Accountability Reports

Congress and the Executive Branch created the Performance and Accountability Report (PAR) to satisfy various statutory reporting requirements. The PAR serves at least two very important purposes.

• It is an effective and easy way for oversight organizations and others to determine the extent to which an agency is fulfilling its mission and managing its resources, plus be able to produced reliable information to support budgeting and decision-making.
• It enables agencies to present, in a comprehensive and integrated manner, the services it is providing to the public, the results it is achieving, what these accomplishments cost, and how it is managing its resources.

Pilot Program

In an effort to make the information more meaningful and transparent to the public, the Office of Management and Budget authorized a Pilot Program in FY 2007. The Pilot Program:

• Permits an agency to replace the PAR with an Agency Financial Report and an Annual Performance Report (in recent years, the two reports had been consolidated into a single performance and accountability report).
• Permits the Annual Performance Report to be issued at the same time as the Congressional Budget Justification (in February), which allows for a more complete performance report.
• Adds a Highlight Document intended to be a brief, use-friendly and easily understood report that summarized the key performance and financial results for the novice reader.

The eleven department and agencies that participate in the PAR Pilot Program issued their Annual Financial reports on November 15, 2009. Separate Highlights will be released by January 15, 2010, and their Annual Performance Reports will be issued in February 2010 following release of the President’s Fiscal Year 2011 Budget. Here are the Financial reports released by the pilots so far:

• Department of Defense
• Department of Education
• Department of Energy
• Department of Health and Human Services
• Department of State (by Dec.15)
• Agency for International Development
• National Science Foundation
• Office of Personnel Management
• Small Business Administration
• Denali Commission
• National Community Service Corporation

Improving Federal Performance Reporting

Valerie Richardson’s report for the IBM Center for The Business of Government: “Increasing Transparency and Accountability in Federal Performance Reporting: Lessons from the OMB Pilot Program” examines agencies' experience with the PAR Pilot Program.

She concludes that it is possible for agencies to submit performance and financial information using alternative formats without diminishing the statutory purposes of performance and financial reporting documents: “Allowing agencies to use alternative methods for presenting these data presents an important opportunity to improve transparency and accountability throughout government, goals emphasized by the Obama Administration.”