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Committee on Financial Services

United States House of Representatives

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The Committee on Banking and Financial Services
U.S House of Representatives, 105th Congress
James A. Leach, Chairman

Phone: (202) 226-0471 Fax: (202) 226-6052 Internet: http://www.house.gov/banking

For Immediate Release                                              
Tuesday, July 29, 1997Andrew Biggs 226-0471


Opening Statement
Chairman James A. Leach
House Banking and Financial Services Committee
Hearing on the Government Performance and Results Act

Today the Committee on Banking and Financial Services convenes its first hearing to review the strategic plans being drafted by federal bank regulatory agencies under the Government Performance and Results Act.

While strategic planning draws a chuckle when mocked in the popular "Dilbert" comic strip, it has the potential - if taken seriously - to be an effective tool for Congress to measure each agency's performance in meeting the public need for which it was created. In the private sector, strategic planning and results measurement are the tested tools of successful enterprises. Many State and local governments have also begun to use this form of organization management and accountability.

Over the last several weeks, the Committee has had the opportunity to review the current draft plans of the banking agencies -- the Fed, OCC, FDIC, NCUA -- and to meet with agency officials to discuss their content. The plans we will review today will, for the most part, include the required mission statements, goals, strategies, links to annual goals, external factors, and evaluations. You can simply tick them off the list. But that would not necessarily meet the spirit of the law. As succinctly noted in the executive summary of a recent GAO report, the Results Act "seeks to shift the focus of federal management and decision making away from a preoccupation with the activities that are undertaken to a focus on the results of those activities as reflected in citizens' lives."

Perhaps the toughest challenge, we are discovering, is the ability of agencies to successfully identify and implement "results" oriented goals rather than output oriented goals and to tackle the task of measuring agency performance. Such an approach requires agencies to break out of a business-as-usual mold and do some original, creative thinking; to ask whether the way they've grown accustomed to doing business is good enough; to do some serious research and forecasting as to public needs over the next five years; to learn to measure what is really important and not necessarily what is easiest to measure, and to find an effective way to communicate to the general public the bottom line; which is what each agency is doing for the public good.

Obviously, as the law itself recognizes in asking agencies to describe "external factors" in their plans, there can be many extenuating circumstances. I am sure some Members of Congress will ask whether a federal government agency can or should be held accountable for a public result when much that affects an outcome is beyond an agency's control. Yet agencies have been created for a specified public purpose and if they are not held accountable to a large measure of the public good, someone is certain to question their continued existence or suggest changes to their mission as provided in statute.

The task of identifying appropriate measurable goals in the long-term strategic plans before us today is a difficult challenge for the agencies. How they meet this challenge will become more clear when annual performance plans are submitted for FY 1999 next February. It is clear in the OMB guidance to agencies on this point that annual goals and indicators should "be expressed in an objective and quantifiable manner" (unless OMB approves otherwise) and have a numerical target level or other measurable value. Only then will it be possible to judge whether agency goals are actually achieved.

Of particular interest to the Banking Committee should be whether the agency goals comport with missions as provided by statute. While it is one thing to put on paper certain goals which may or may not appear to follow an agency's statutory framework, it is quite another issue to look at the actions of an agency and how they relate to the appropriate mission of the agency. In this regard, the Chair may want to review some recent agency activities in relation to the existing statutory framework for bank regulatory agencies.

To present specific agency plans, we have appearing before us today representatives of each banking agency: Vice Chair of the Federal Reserve Alice Rivlin; FDIC Acting Chairman Andrew Hove, Vice Chairman of the NCUA Shirlee Bowné, OCC Comptroller Eugene Ludwig, and OTS Director Nicolas Retsinas.

On our second panel we will have Thomas McCool, Economist and Associate Director of GAO, and last, but not least, we are pleased to have two private sector witnesses with extensive experience in the federal government and in the field of strategic planning and performance measurement, Gerald R. Riso and C. Morgan Kinghorn.

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