Using Performance to Deliver Promises

Call it the great intergovernmental camera caper. Although it might not have involved millions of dollars in spending, it did illustrate the sometimes absurd consequences...
by | March 1, 2010 AT 10:00 AM

Call it the great intergovernmental camera caper. Although it might not have involved millions of dollars in spending, it did illustrate the sometimes absurd consequences of narrow categorical federal grant making, say those who got caught up in the swirl of the controversy: About 10 years ago, the U.S. Environmental Protection Agency's (EPA) Inspector General's Office took the Massachusetts Department of Environmental Protection to task for using a camera paid for by funds from its air pollution program to document noncompliance problems related to water pollution.

Silly, perhaps, but the dustup was symbolic of a much deeper problem between states and the EPA at the time: When it came to measuring performance, states weren't being held accountable for a cleaner environment, they were being held accountable for whether federal dollars they received were being properly spent according to category: air, water, hazardous waste and so forth.

Shortly after that, the EPA did something very sensible, says Jonathan Breul, then-senior adviser to the deputy director for management at the U.S. Office of Management and Budget (OMB). Rather than dinging states for not following proper spending procedures, the EPA -- with the OMB's encouragement -- formed "performance partnerships" with states based on an agreed-upon set of environmental outcomes that states wished to achieve with federal help. Additionally the EPA and OMB asked for and received congressional authority that allowed states to consolidate EPA funding streams into a single block grant.

It all sounds simple and logical enough. But that was 10 years ago, and since then, progress toward a more performance-and-results-informed approach to intergovernmental programs, policies and, most important, spending more broadly, has progressed erratically, if at all.

In fact, it's no exaggeration to say that the most recent significant effort to pursue performance-based federalism is fading away with barely a whimper.

The much vaunted No Child Left Behind Act, which was meant to kick-start a huge and productive experiment in using educational metrics to support and highlight educational best practice across the nation -- while spurring students and schools onto new heights of educational excellence in the process -- instead quickly deteriorated into a running squabble over jurisdiction, the accuracy and usefulness of data, cause, effect and accountability. Worse, the No Child Left Behind Act actually inspired some school systems to dumb down scholastic achievement tests to boost their numbers on educational "achievement." "If No Child Left Behind wasn't dead on arrival, after five years, it's pretty much exhausted itself," says Paul Posner, former head of the Government Accountability Office's intergovernmental section and now a professor of public policy at George Mason University. (Supporters of the Obama administration's new Race to the Top educational grants, by contrast, argue that the new grant program is an approach to intergovernmental education funding that will hold schools and teachers to high standards of performance and results.)

The reasons for the lack of progress in the whole area of performance-informed intergovernmental relations are manifold and familiar, but two in particular tend to dominate: States don't want to be held accountable for results that they often argue they have no control over. Meanwhile, they're perennially afraid of being rated against one another, arguing that they're way too different to accommodate fair comparison.

Congress, for its part, continues to evince a significant lack of literacy or interest when it comes to looking at data on performance and results as it relates to intergovernmental policy and spending. Congressional overseers seem to prefer gauging the performance of their subpartners in governance by whether federal dollars are properly spent, and not by whether those dollars purchased things like improved socio-economic well-being.

That's a point of long-running stalemate, however, that some now think has the potential to break loose -- or at least move. Two recent developments have some of the longest suffering advocates of performance-informed federalism thinking that there's something in the wind in Washington that portends a shift.

The first development is at the federal OMB, which under the Obama administration has added a key responsibility to the job of deputy director for management: chief performance officer.

Immediately dubbed the federal "performance czar," OMB Deputy Director Jeffrey Zients has, in turn, made key high-level appointments at the OMB that are encouraging to those who have for years advocated a shift to a more cooperative, enlightened and results-based approach to intergovernmental relations.

The addition, for example, of Shelley Metzenbaum to the OMB management and performance team is a clear signal that the OMB wants to change its relationship with states and localities, thinks Breul, now executive director of the IBM Center for the Business of Government. In fact, it was Metzenbaum-who most recently was director of a performance-focused management center at the University of Massachusetts, Boston -- who led the successful effort to create the performance partnership between states and the EPA, while serving as the EPA's head of intergovernmental relations during the Bill Clinton administration.

The second development -- at the eastern end of Pennsylvania Avenue -- was the announcement in October 2009 that the Senate Budget Committee was forming a bipartisan Task Force on Government Performance, co-chaired by Sens. Mark Warner, D-Va., and Judd Gregg, R-N.H. According to the budget committee's Web site, the task force was created to "examine the federal government's management framework and identify opportunities to improve the efficiency and effectiveness of federal programs and services."

If that still sounds a bit fed-centric, those who've been toiling in the trenches to improve intergovernmental relations by focusing on performance make one very simple and straightforward point: The federal government's "effectiveness and efficiency" is vastly dependent on the performance of states and localities, which are the levels of government that are actually responsible for delivering a huge hunk of the results that Congress says it wants to achieve through the legislation it passes.

In areas of environmental protection, education, transportation, economic development, health and homeland security, it's state and local governments that are responsible for delivering the goods. "It is important to understand how dependent the federal government really is on states and localities for delivering actual results," says Posner.

And, in fact, Warner says he gets that completely. "If there's any value that I bring to the task force," Warner says, "it's that as a governor, I've lived the interconnection between the federal government as the check writer and state and local government as implementer."

The problem, says Breul, is that Warner is an outlier on Capitol Hill when it comes to understanding that relationship, something that he finds especially discouraging given recent congressional action. "If the American Recovery and Reinvestment Act wasn't a wake-up call to Congress that the federal government is essentially an ATM to states, I don't know what would be," Breul says. "And guess who will be substantially responsible for delivering on health-care reform: governors."

The fact that the feds are so dependent on their colleagues at the state and local levels for delivering on huge promises made in Washington, D.C., ought to be inspiration enough to swing Congress onto a new course of policy and grant making, argue people like Posner and Breul. But creating mechanisms that actually reflect that reality has been another major rub. In the past, the feds have whipsawed between open-ended block grants to states and localities that carry few or no strings at all, including requirements on documenting results, versus brutally categorical grants that "carve out separate funding streams for the disabled, the cross-eyed and the left-handed," says Breul.

The basic model that most advocates of performance-informed federalism promote is, in fact, the performance partnership concept Breul supported at the OMB, and that Metzenbaum helped create while at the EPA. And there are good examples-besides the EPA -- where such partnerships, formal and informal, are in place and working well.

One of Metzenbaum's favorite examples is the National Highway Traffic Safety Administration. It has a long history of gathering very detailed information from states on highway fatalities, analyzing that information, and then feeding it back to states in a way that allows state transportation officials to compare themselves to one another and also learn interstate lessons through the Fatality Analysis Reporting System (FARS).

Examples abound about FARS' success. For instance, states have reduced fatal accidents by following the leader on new asphalt compositions and better road designs -- never mind the more widely publicized findings that seat belts and motorcycle helmets dramatically reduce highway fatalities.

It's a type of intergovernmental performance reporting that not only spotlights data on state performance but, even more important, also allows state officials to change key policies and practices to improve results, says Metzenbaum. And that should be a fundamental role of the federal government, she argues: collecting, analyzing and disseminating information on results and best practices that states and localities can then use to improve performance. It's a dual payoff, she says: These arrangements allow the federal government to gauge whether federal dollars are being spent wisely, and they position the feds as an important institution of learning and teaching.

The problem is that virtually every example of a federal agency working closely and effectively with state and local partners represents an executive-level initiative and not a congressional directive. So one of the big questions for Warner's task force is what the Senate Budget Committee can do to influence its own.

That presents two challenges, says Warner. First, Capitol Hill tends to be overly focused on waste, fraud and abuse when it comes to assessing how well states and localities handle federal money. "It's not, 'Did you achieve the policy goals we were after?'" says Warner. "It's, 'Did the wrong people pocket some of the money?'"

That will be a tough hurdle to overcome, says John Kamensky, also an ex-OMB official now with the IBM Center for the Business of Government. Kamensky notes that in recent hearings before Missouri Democrat Sen. Claire McCaskill's Subcommittee on Contracting Oversight in the Homeland Security and Governmental Affairs Committee, the senator wanted to talk to the new federal performance czar Zients about plans to reduce waste and improve accountability in federal contracting, and not about ways to gauge whether the money handed over to contractors is actually buying intended results.

The second hurdle for the Warner task force: Capitol Hill is a brutally fragmented place, which means getting lawmakers to coalesce around an issue and to actually focus on clear, sensible outcomes will be tough to do. "As governor I used to complain about lack of coherence coming out of Washington," Warner says. "It wasn't until I got here that I realized what the root problem was: fragmentation on the Hill."

Warner's plan is to tackle both problems -- a seriously siloed oversight environment, and an obsession with tracking dollars versus results -- by choosing carefully what the task force will address. One issue for investigation, he says, will be how the federal government goes about purchasing IT as a way to look at procurement efficiency across agencies. On the policy side, he thinks focusing on a broad, cross-cutting issue like food safety might be the ticket because it falls under the jurisdiction of multiple congressional committees, federal agencies, states and localities; and it is of clear concern to citizens and of clear interest to the media. "It's an issue where you have policy goals that are managed at the state and local level, and which the federal government oversees through more than a dozen programs and secretariats," says Warner.

Which leads to the final large question: Will states and localities -- which often complain bitterly about irrational, overbearing and misplaced federal oversight -- be ready and willing to embrace partnerships based on performance?

That's a question with at least 50 answers at the state level and hundreds at the local level. But one local and state veteran of the performance measurement debates thinks it's worth a shot: "When you look at the federal government's relationship to states and states' relationship to localities, these are large and complex systems," says Maryland Gov. Martin O'Malley, who took the CitiStat system he created as mayor of Baltimore and adapted it to state government. "So if we really want them to work well together, then we all have to have the guts to measure and publicly report outcomes. If we do that, then I think we create much more flexible and dynamic systems, and we could get a lot accomplished."

These articles are part of a continuing series on public performance measurement focusing on citizen involvement. Support has been provided by the Alfred P. Sloan Foundation. Although the foundation may assist some of the programs described in these articles, it had no control or influence over the editorial content, and no one at Sloan read the material prior to publication. All reporting and editing was done independently by Governing staff.