The document discusses performance budgeting at the sub-national level in the United States. It provides context on the fiscal relationship between federal, state, and local governments. States have significant autonomy but the federal government provides grants that comprise about a third of state spending and often have accountability requirements. The framework for performance budgeting and management at the federal level was established by the GPRA Modernization Act of 2010. Some unique challenges for performance budgeting at the sub-national level include the diversity of local governments and balancing compliance and innovation when relying on funding from multiple levels of government.

1. SPECIAL SESSION ON CHINA
PERFORMANCE BUDGETING FOR SUB-NATIONAL ENTITIES
David Rowe
Deputy Assistant Director for Budget
U.S. Office of Management and Budget

2. Overview
• High-level overview of the fiscal relationship in the
United States.
• Performance budgeting framework at the Federal level.
• Some unique challenges at the sub-national level.

3. Fiscal Relationship Across Levels of Government
• Historically, US States have had a significant degree of fiscal
autonomy.
• 10th Amendment to the US Constitution: The powers not delegated to the
United States by the Constitution, nor prohibited by it to the States, are
reserved to the States respectively, or to the people.
• States have autonomy in how they organize themselves, and
in the structure their local governments.
• The Federal government provides and pays for:
• Explicitly defined national needs, like national defense and social
insurance.
• Formula and competitive grants to State and local governments.
• Federal Grant Programs:
• Comprise about a third of total State spending.
• Has steadily grown in the past few decades.
• Often have performance/accountability requirements tied to them.

4. Revenues by Source and State/Local Expenditures
Federal, State, and Local Government Revenues by Source, 2016
[Millions of Dollars]
Federal State Local
government government government
amount amount amount [1]
Revenue [2] 3,267,961 1,478,129 1,196,321
Taxes 3,267,961 922,856 676,593
Property 15,945 487,293
Sales and gross receipts 95,026 441,124 117,722
General sales 291,473 85,439
Selective sales/excise 95,026 149,652 32,284
Individual income 1,546,075 343,621 32,677
Corporate income 299,571 46,202 8,057
Motor vehicle license 25,566 1,935
Social insurance/retirement 1,115,065
Other taxes 212,224 50,397 28,908
Other revenue 534,115 503,747
Charges and misc. general revenue
328,894 472,893
Utility revenue 13,070 14,559
Liquor store revenue 8,089 1,422
Insurance trust revenue 205,221 14,873
[1] Duplicative intergovernmental transactions are excluded.
[2] Utility and liquor store revenues are excluded.
Federal Government Source:
OMB, Budget of the US Government FY 2020, Historical Tables, Table 2.1
State and Local Source:
Suggested Citation: State & Local Government Finance Data Query System.
http://slfdqs.taxpolicycenter.org/pages.cfm. The Urban Institute-Brookings Institution Tax Policy Center.
Data from U.S. Census Bureau, Annual Survey of State and Local Government Finances, Government
Finances, Volume 4, and Census of Governments (2016). Date of Access: (07-Aug-2019).

5. Grants to State and Local Governments: Funding
History
0
100
200
300
400
500
600
1940 1950 1960 1970 1980 1990 2000 2010 2017
BillionsofDollars*
Fiscal Year
*Constant FY 2009 Dollars

6. US Federal Performance Framework:
The Only Constant of Management Reform is…Change
1966 President Johnson’s “Planning, Programming, and Budgeting
System”
1968 President Nixon’s “Management by Objective”
1977 President Carter introduced “Zero-based Budgeting”
1981 Reagan’s Management “Reform 88”
1993 Reinventing Government Initiative and Government.
Performance and Results Act (GPRA)
2002 President’s Management Agenda Scorecard and Program
Assessment Rating Tool
2010 GPRA Modernization Act

7. GPRA Modernization Act of 2010
• The GPRA Modernization Act of 2010 established the current Federal
Performance Framework.
• The framework provides the foundation of routines and processes by
which various management functions and decision-support
capabilities can integrate into to improve agency performance and
program service delivery.
• The approach to delivering more effective and efficient Government
rests on the following proven management practices:
• Engaging leaders;
• Focusing on clear goals and data-driven performance reviews that
incorporate a broad range of qualitative and quantitative inputs and
evidence;
• Expanding Impact through strategic planning and strategic reviews;
• Strengthening agency management capabilities, capacity, collaboration
and integration, and;
• Communicating performance results and information effectively.
7

8. Hardwiring a Focus on Results and Implementation
GPRA Modernization Act of 2010:
1. Created transparent roles and responsibilities:
• Role for OMB, Agency Head, newly designated COO (usually Deputy), Performance
Improvement Officer, Goal Leaders
2. Aligned planning processes with election cycles:
• Revised strategic plans due within one year of new term beginning, rather than
every 3 years
3. Established the Performance Improvement Council:
• A formal body chaired by OMB and defined in law…PIOs from the 24 large federal
agencies – supports cross-agency collaboration and best practice sharing.
4. Requires progress reviews of Priority Goals at least once a quarter:
• reviews must be conducted by top agency leaders
• involve goal leaders and other contributors, and
• be used to identify at-risk goals and strategies to improve performance
5. Requires annual assessments of strategic objectives in Agency Strategic
Plans:
• Annual strategic review that assesses the effectiveness of programs and
implementation strategies towards achieving strategic goals and outcomes.
8

9. • Quarterly Performance Reporting on Central Site (Performance.Gov)
Goals Timing Performance
Reviews
Number
1. Federal Cross-
Agency Priority
(CAP) Goals
Every 4 years
(Current span 2018-
2022)
Quarterly reviews
by OMB
Director/PIC
14
2. Agency Priority
Goals (APGs)
Every 2 years
(Current span 2018-
2019)
Quarterly reviews
by agency COO/PIO
86
3. Strategic Goals
and Objectives
Every 4 years
(Current span 2018-
2022)
Annual strategic
reviews
by agencies and
OMB
~ 300
Policy Framework for the GPRA Modernization Act
9

10. How Effective is the Performance Framework?
A rigorous performance framework, and requirements to
integrate budgeting and performance, do not necessarily
mean budget decisions are driven by that framework.
• What information are policymakers using to make budget
decisions?
• What information is the legislative branch using to make budget
decisions?
• What other factors are driving budget decisions (size/role of
government, policy preferences, optics, incremental changes,
negotiation tactics, etc.)?
• Is their buy-in from leadership?
• How are the requirements met (compliance vs. driving the
conversation)?

11. How Effective is the Performance Framework? ‘cont
• It is important to look not just at the process that has
been created, and examine how or whether it is
changing decision-making and behavior.
• It is difficult to mandate buy-in or changes in behavior.
• Account for the perspective of a diverse set of
stakeholders.

12. Performance Budgeting: Challenges at the Local Level
• Diversity in size and scope of sub-national governments
makes implementation challenging.
• Mix of Federal, State and Local funding makes
performance management difficult.
• Compliance requirements from upper levels can crowd out
innovation.
• Easier to innovate/experiment with local dollars.
• Striking the right balance between data-based and
value-based decision-making.
12

13. QUESTIONS?
13

14. Blank Slide– Supplementary Materials
Follow
14

15. IMPLEMENTING THE
POLICY FRAMEWORK
OMB Circular A-11, Part 6

16. Federal Performance Management Cycle
16

17. Goal Framework and Hierarchy – Example Illustration 17

18. Senior agency leaders typically focused on policy,
communications, budget, legislation —not delivery
of results
To achieve the Administration’s goals,
we need leaders to focus on driving results through
improved implementation
18
1. Why Agency Priority Goals (APGs)?

19. Agency Priority Goal Policy Overview
Engage Agency
Heads
Identify Goal
Leaders
Action Plans Quarterly
Data-Driven
Performance
Reviews
Public Updates on
website
19
-Senior Goal
Leader
-Deputy Goal
Leader
-Quarterly
Targets
-Quarterly
Milestones
-Agency Reviews
-OMB Reviews
based on
Quarterly
Progress Update
& Data
-Progress on
Priority Goals
Reported on
website
-2 to 8 set by
agency heads
-Ambitious
-Meaningful
-Measurable
-Within Current
Budget, Legislative
authorities
-Identify
problems
-Strategy
-Measures
-Milestones
-Contributing
Programs
-Management
Review
Processes

20. 2. Why Cross-Agency Priority (CAP) Goals?
Ingredients Outcomes
Right Goal Faster Decisions
Senior Level Attention Better Decisions
Engaged Goal Team Barriers Removed
Clear Focus Increased Coordination
Defined Delivery
Chain
Increased Accountability
More Visibility
• Tool to address the longstanding challenge of tackling
horizontal problems across vertical organizational silos.
• We have existing inter-agency processes for budget,
legislation, and policy decisions, but lack mechanisms for
coordinating implementation activities across multiple
agencies
20

21. What are CAP Goals?
• Presidential priorities which are long-term in nature. Set one year after a new term begins.
We currently are in our second round of CAP goals with a 4-year time horizon.
• The Administration leverages CAP Goals to coordinate and publicly track implementation of
the President’s Management Agenda across Federal agencies.
How we implement and hold people accountable.
• Establish Co-Goal Leaders and Deputy Goal Leaders from both EOP and Agencies
• Develop action plans with metrics, quarterly milestones, governance structures and
contributing programs
• Goal Leaders responsible for reviewing progress regularly with contributing programs.
reviews progress quarterly with monthly deep dives; public updates reported each quarter
performance.gov to increase accountability
Established additional capacity for cross-agency work.
• Realized lack of capacity was major risk to long-term success.
• $15 million fund to support cross-agency activities for CAP Goals; 2) White House
Leadership Development Program which details 10-15 top performers (GS-15, SES
candidates) to support CAP goals for one-year rotations.
CAP Goal Overview
21

22. Learning
• Lessons learned - what happened and why
• Research and improved understanding
• Exploration and innovation
Improvement Actions
• Changes to strategy and tactics
• Operational improvements, administrative reforms
• Budget and legislative proposals
22
3. Why Strategic Reviews?
After the passage of the GPRA Modernization Act, which aligned agency strategic plans to Administration transitions, OMB
established annual Strategic Reviews. These reviews are an annual assessment which synthesizes broad sources of evidence to
inform budget, legislative, and management decisions, and are primary management policy for budget/performance integration.
• The Strategic Reviews are also how OMB Implements ERM, recognizing the importance of agencies to better manage risks to goal
achievement.

23. 3. Why Strategic Reviews?
Strategic Reviews are:
• Annual assessments that synthesize available performance information and
evidence to inform budget, legislative, and management decision.
• Conducted by agencies for each “Strategic Objective” in an agency Strategic
Plan, with OMB review.
Strategic Reviews:
• Help meet the needs of leadership in identifying opportunities for reform
proposals, executive actions, communications opportunities, etc.
• Synthesize a broad evidence and information base (indicators, evaluations, risk
management, partner contributions, external factors, research, etc.) and
prioritize findings for decision-making.
• Make meaningful distinctions in performance, such as identifying areas of
noteworthy progress and significant challenges.
• Incentivize organizations to develop a culture focused on learning and
improving performance.
• Enable OMB and agencies meet GPRAMA’s “Unmet Goals” provision and the
escalating reporting requirements for the Director of OMB to submit
recommendations to Congress on actions to improve performance (Section
1116f).
OMB Role:
• Discuss appropriate review framework and methodology
• Review agency findings and supporting information with focus on systematic
identification of need for strategic revisions and risk mitigation
• Ensure alignment between Administration policy and resource requests in
President’s Budget; provide early guidance on budget development where
appropriate
23

24. 3. Strategic Review Process & Timeline
24
Agency
Methodology
Developed
Agency
Conducts
Review
OMB
Engagement
Agency
Submission
Publication
• Annual
Performance
Report includes
findings and
Performance
Plan proposes
improvement
actions
• President’s
Budget reflects
key proposals
• Agencies
provide OMB a
“summary of
findings” from
their review for
deliberation
• OMB provides
feedback and
priorities for
policy and
budget
development
• Agencies
assess each
objective
• Agency leaders
determine
proposed
changes to
operations or
budget and
legislative
proposals
• Agencies
develop a
method to
assess progress
• OMB reviews
method
• Agency budget
and
performance
submissions
incorporate
findings and
OMB feedback
Winter Spring May Sept. Feb.
The “strategic review”

25. Strategic Reviews
Examples of Agency Assessments
Office of Management and Budget

26. 26
FY 2020 Budget by Strategic Objective*
Dollars in millions Actual Enacted Requested Outyear
Strategic Objective FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024
Discover
1.1: Understand the Sun, Earth, solar
system, and universe.
6,211.5 6,291.9 6,303.7 6,319.0 6,319.0 5,846.5 5,815.0
1.2: Understand responses of physical and
biological systems to spaceflight.
375.4 360.8 352.7 368.7 360.7 345.1 332.6
Explore
2.1: Lay the foundation for America to
maintain a constant human presence in
low Earth orbit enabled by a commercial
market.
2,027.9 2,155.0 2,104.4 2,146.7 2,194.4 2,144.3 2,122.6
2.2: Conduct exploration in deep space,
including to the surface of the Moon.
4,790.0 4,698.8 5,021.7 5,295.5 5,481.4 6,639.0 7,042.3
Develop
3.1: Develop and transfer revolutionary
technologies to enable exploration
capabilities for NASA and the Nation.
760.0 760.0 1.014.3 976.1 995.4 964.4 943.1
3.2: Transform aviation through
revolutionary technology research,
development, and transfer.
690.0 685.0 666.9 673.6 680.3 587.1 587.0
3.3: Inspire and engage the public in
aeronautics, space, and science.
108.4 118.1 8.3 8.3 8.3 8.3 8.3
Enable
4.1: Engage in partnership strategies. 69.8 84.2 86.7 86.0 85.4 84.8 84.3
4.2: Enable space access and services. 2,345.8 2,108.4 1,828.6 1,854.1 1,814.5 1,746.2 1,727.2
4.3: Assure safety and mission success. 175.7 175.1 192.0 192.0 194.2 186.2 186.2
4.4: Manage human capital. 38.4 68.5 69.2 68.6 68.8 67.8 67.4
4.5: Ensure enterprise protection. 390.2 350.2 388.1 385.9 370.6 374.5 362.1
4.6: Sustain infrastructure capabilities and
operations.
2,714.1 2,452.0 2,940.7 2,812.6 2,826.1 2,618.8 2,551.1
*FY 2020 budget released in NASA’s FY 2020 Volume of Integrated Performance in March 2019. Budget does not include the $1.6 billion budget amendment
approved in May 2019 or the FY 2020 budget for the Office of Inspector General.

27. 27
Summary of Performance
Lead
Office(s)
Strategic
Objective
2019 Strategic Review
Assessment
FY 2019 PGs FY 2019 APIs
Green Yellow* Red* Green Yellow* Red*
StrategicGoal1
SMD 1.1 Satisfactory Performance 23 0 1 39 3 1
HEOMD 1.2 Noteworthy Progress 1 0 0 5 0 0
Strategic Goal 1 Total 25 48
Strategic Goal 1 Total by Rating 24 0 1 44 3 1
Strategic Goal 1 % of Total by Rating 96% 0% 4% 92% 6% 2%
StrategicGoal2
HEOMD 2.1 Noteworthy Progress 3 0 0 7 1 0
HEOMD 2.2 Focus Area for Improvement 2 2 0 3 4 1
Strategic Goal 2 Total 7 16
Strategic Goal 2 Total by Rating 5 2 0 10 5 1
Strategic Goal 2 % of Total by Rating 71% 29% 0% 63% 31% 6%
StrategicGoal3
STMD 3.1 Satisfactory Performance 4 0 0 7 0 0
ARMD 3.2 Satisfactory Performance 5 1 0 9 1 0
MSD/OCOM 3.3 Satisfactory Performance 5 0 0 10 0 0
Strategic Goal 3 Total 15 27
Strategic Goal 3 Total by Rating 14 1 0 26 1 0
Strategic Goal 3 % of Total by Rating 93% 7% 0% 96% 4% 0%
StrategicGoal4
MSD 4.1 Satisfactory Performance 3 0 0 6 0 0
HEOMD 4.2 Satisfactory Performance 7 1 0 8 1 0
Tech. Auth. 4.3 Focus Area for Improvement 2 0 0 8 0 0
MSD/OCHMO 4.4 Noteworthy Performance 2 0 0 5 0 0
PAEP/OCIO 4.5 Satisfactory Performance 1 2 0 3 2 0
MSD 4.6 Focus Area for Improvement 3 0 0 5 0 0
Strategic Goal 4 Total Measures 21 38
Strategic Goal 4 Total by Rating 18 3 0 35 3 0
Strategic Goal 4 % of Total by Rating 86% 14% 0% 92% 8% 0%
NASA Total Number by Rating 61 6 1 114 13 2
NASA Total Measures 68 Performance Goals 129 Annual Performance Indicators
NASA % of Total by Rating 90% 9% 1% 88% 10% 2%
Green = Achieved or on target, Yellow = Slightly below target or behind schedule, Red = Significantly below target or behind schedule
NASA’s 2019 Strategic Review and FY 2018 Performance Goals (PGs) and Annual Performance Indicators (APIs)
See the FY 2020 Volume of Integrated Performance for more information on all of NASA’s FY 2018 PGs and APIs.

28. SR Process
Chief Financial Officer/PA&E 28
DHS Annual Performance Report (APR)
DPIO in consultation with the PIO
and Chief Operating Officer
HQ SMEs
Theme – Border
Operations
Mission Program
– Border Security
Operations
CBP
Integrated
Operations
CBP
SME
Assessment Lead -
SES Level
OMB Review and Finalization
Assessment
Team
Assessment
Lead
Headquarters
Review Team
Senior
Leadership
Who
OMB
Leads team
– produce
deliverables
Review
results and
brief
leadership
Review
results
What
Conduct
Assessment
Finalize
results
SME SME SME
Mission Program
– Maritime Law
Enforcement
USCG
SME SME

29. Progress Ratings in FY19
With Mission Program (PPA) Funding
Chief Financial Officer/PA&E 29Funding is FY18 Enacted Budget from the FYHSP System –
does not include the Disaster Relief Fund dollars

30. Progress Rating Trends by Theme
Chief Financial Officer/PA&E 30
Historical Review Ratings
Theme FY15 FY16 FY17 FY18 FY19
Border Operations
Transnational Organized Crime
Immigration Enforcement
Transportation Security
Critical Infrastructure
Federal Network Security
Leaders, National Security Events, and Financial Systems
Man-Made or Natural Incident Preparedness
Man-Made or Natural Incident Response
Man-Made or Natural Incident Investments
Trade and Travel
Immigration Benefits
Waterways and Maritime Resources
Intelligence and Information Sharing
Noteworthy Progress
Satisfactory progress
Focus Area
Not Applicable

31. Goal 2. Objective 3: Reduce the impact of mental and substance use
disorders through prevention, early intervention, treatment, and recovery
support
31Draft Pre-decisional Not for Distribution
Key Performance Indicators FY 18 Outcomes
Increase the number of substance abuse treatment admissions
with Medication-Assisted Treatment planned as part of Opioid
Use Disorder Treatment
Target: 200,000
Result: Pending
Reduce the age-adjusted annual rate of overdose deaths
involving prescription opioids per 100,000 population among
states funded through Prescription Drug Overdose Prevention
for States program
Target: 11.8
Result: Pending
Increase the availability of electronic clinical decision support
tools related to safe pain management and opioid prescribing
Target: 1 new tool
Result: 1 new tool
(Met)
By 2020, evaluate the efficacy of new or refined interventions
to treat opioid use disorders
Target: 1 study
Result: 1 study (Met)
Increase the percentage of youth ages 12-17 who experienced
major depressive episodes with severe impairment in the past
year receiving treatment for depression
Target: 48%
Result: Pending
Increase the percentage of adults with Serious Mental Illness
receiving mental health services
Target: 67%
Result: Pending
FY 18 Progress Categorization
Progressing
Key Risks and Challenges
• RP: Program Implementation - medium risk
and medium priority.
• IG: Preventing and Treating Opioid Misuse
• IG: Protecting the Health and Safety of
Vulnerable Populations
Next Steps
• OA: Oversee efforts to increase substance use provider capacity, by providing an
enhanced Medicaid match rate for select states.
• LP: Proposal to prevent abusive prescribing by establishing HHS reciprocity with the
Drug Enforcement Administration to terminate provider prescribing authority.
• OA,FP: Increase funding for Assertive Community Treatment services.
• OA,FP: Increase funding for Behavioral Health Treatment Court Collaborative grants.
Key Evidence
• Developed five part strategy to tackle the
epidemic of opioid abuse.
• State Targeted Response to the Opioid Crisis
Grant Program grants increased access to
prevention, treatment, and recovery activities
to reduce overdose-related deaths.
• Addressed substance abuse through Rural
Communities Opioid Response, National
Health Service Corps, Behavioral Health
Workforce, and Health Centers Programs.
• Evaluation of criminal and juvenile justice
programs reported mental health issues
declined by 20% in the first six months of the
program; alcohol and other drug use declined
by 60%; and employment rates increased
from 36% to 45%.
• Awarded seven new grants for Assertive
Community Treatment services to reduce
hospitalization, homelessness, and
involvement in the criminal justice system for
individuals with serious mental illness while
improving health and social outcomes.

32. COMMUNICATING
RESULTS
Performance.gov

33. Utilize Performance.gov as a platform for:
1. Data Transparency
2. Accountability
3. Communications

34. References
Enacted Legislation
• Pub. L. No. 103-62: The
Government Performance
and Results Act (GPRA).
• Pub. L. No. 111-352: The
GPRA Modernization Act of
2010.
• Pub. L. No. 114-264: The
Program Management and
Improvement Accountability
Act (PMIAA).
• Pub. L. No. 115-435: The
Foundations for Evidence-
Based Policymaking Act of
2018.
Policy Guidance / Resources
• OMB Circular No. A-11,
Part 6: The Federal
Performance Framework
for Improving Program
and Service Delivery.
• OMB Circular No. A-123:
Management’s
Responsibility for
Enterprise Risk
Management and
Internal Control.
34