Introducing FSA’s Budget and Performance Management System (BPMS) with a New Strategic Plan

1. Introducing FSA’s Budget and Performance Management System (BPMS) with a New Strategic Plan …for better decision making and accountability to citizens! April 14, 2005 Karen Malkin, Director Strategic Performance and Evaluation Staff Dennis Taitano, Director Budget Division

2. What is the Farm Service Agency? • Farm Service Agency (FSA) is a major agency of the U.S. Department of Agriculture. • FSA was created in 1994 by incorporating the commodity and conservation programs of the former Agricultural Stabilization and Conservation Service (ASCS) and the lending programs of the Farmers Home Administration (FmHA). Cleveland, 1940 • The Agency’s name has changed over the years, however, its relationship with farmers and ranchers dates back to the 1930s. Serving farmers and ranchers is a major component of USDA’s mission.

3. FSA Business Lines • FSA delivers a wide variety of programs to over 2.2 million registered agricultural producers. • Farm commodity programs • Farm credit -- ownership, operating and emergency loans • Conservation and environmental programs • Emergency and disaster assistance • Domestic and international food assistance • International export credit programs

4. FSA Programs FSA Programs are legislated by: • Farm Bill • Annual Appropriations • Disaster and Emergency Acts

5. Program Delivery • Agricultural producers apply for benefits and service from their local USDA Service Center. • FSA has over 2,400 Service Centers nationwide, including local offices in Puerto Rico and Guam. • FSA has 51 State Offices, including Puerto Rico.

6. Decentralization & Local Governance • FSA workforce = 17,000 Federal and non-Federal employees • State and local county-elected committees oversee the delivery of FSA programs. • Committee system and local governance sets FSA apart.

7. Why is FSA Seeking to Transform? • Link program results to budget requests. • Dismantle existing “stove pipes.” • Streamline business processes. • Improve accountability. • Align resources effectively. • Improve employee engagement. • Improve customer service & satisfaction. • It’s good business! • “Better Performance Makes Sense!”

8. Organizational Issues Facing Agencies Striving to Transform FROM Delivering and Monitoring Outputs Hierarchical Micro-management Working in Stovepipes Protecting Turf Hoarding Knowledge Avoiding Risk Adversarial Labor/Management Relations Avoiding New Technology TO Delivering and Monitoring Results Horizontal (i.e., flatter) Employee Empowerment Working in Matrixed Teams Forming Partnerships Sharing Knowledge Managing Risk Constructive Labor/Management Relations Embracing and Leveraging New Technology

9. What is BPMS? BPMS is management tool to facilitate FSA's transformation to more performance-based, results-focused agency. Links and integrates FSA's budget, cost, and performance management information. Begins with new Fiscal Years 2005 – 2011 Strategic Plan. “What gets measured gets done AND funded!”

10. Systems & Technology Performance Management • Planning & Budgeting • Cost & Performance • Governance & Accountability • Human Capital Plan • Reporting & Budgeting • Finance & Accounting • Program Management – Program Assessment Rating Tool (PART) • Other (e.g., Human Resources, Procurement) Key Elements BPMS Strategic Plan Framework People – Processes - Systems

11. Budget and Performance Management System

12. BPMS Management Structure FSA Administrator Associate Administrator for Operations and Management Associate Administrator for Programs Director, Office of Business and Program Integration Director, Strategic Performance and Evaluation Staff BPMS Core Team • Strategic Performance & Evaluation Staff Director, Co-Chair • Budget Director, Co-Chair • Senior Managers: • Farm Programs • Farm Loan Programs • Commodity Operations • Field Operations • External Affairs • Civil Rights Key Advisors • Information Technology Division • Economic and Policy Analysis Staff • Financial Management Division • Human Resources Division • State and County Offices

13. Engaging External Stakeholders • Six full-day external stakeholder meetings in Omaha, Sacramento, and Washington, D.C. • Input from 250 External Stakeholders: • Farmers and ranchers • Conservation and environmental groups • State and Federal agencies • Commodity groups and trade associations • Community-based and civil rights organizations

14. FSA FY 2005-2011 Strategic Plan Photos Courtesy of USDA

15. Strategic Goal 3 Conserving Natural Resources and Enhancing the Environment END OUTCOMES END OUTCOME 1 Quality Soil____________________ INDICATOR • Reduced erosion rates. END OUTCOME 2 Quality Water _____________________ INDICATOR • Reduced ground and surface water contamination. END OUTCOME 3 Quality Wildlife Habitat _____________________ INDICATOR • Increased populations of targeted species. END OUTCOME 4 Quality Air _____________________ INDICATOR • Increased tons of carbon dioxide sequestered. INTERMEDIATE OUTCOMES OBJECTIVE 3.1 Improving Conservation Practices ______________________________ PERFORMANCE MEASURES M1 Maintain or increase % of acres in compliance with highly erodible land and wetland provisions. M2 Increase % of conservation acres with invasive species controls. OBJECTIVE 3.2 Targeting Lands to Maximize Conservation Benefits _______________________________ PERFORMANCE MEASURES M1 Increase acres managed under Continuous Conservation Reserve Program (CRP) sign-up. M2 Increase general sign up acres in priority areas. M3 Reduce average processing time of conservation offers through partnerships and technology: - FSA time* - partner time*. OBJECTIVE 3.3 Mitigating Adverse Impacts From Agricultural Production _______________________________ PERFORMANCE MEASURES M1 Increase CRP acres of riparian and grass buffers. M2 Increase % of CCC sites where remediation is implemented. M3 Increase CRP restored wetlands acres. *Asterisk denotes efficiency measure. PRODUCTS and SERVICES 26

16. End Outcomes and Indicators Three Societal Strategic Goals – High Level FSA plays a role in achievement of these societal goals, but Agency is not solely responsible for end outcomes. Strategic goals are relevant beyondFSA – USDA and many other agencies and private entities play roles.

17. Example Showing Interagency Responsibilities 28

18. End Outcomes and Indicators • Indicators with End Outcomes are measured every 3 years by reviewing relevant statistics to see trends. • Indicators arenot reported with FSA’s Performance Budget. • Indicators are notdirectly linked to individual employee performance.

19. Objectives and Performance Measures Short-Term Results to Accomplish – Intermediate Level FSA can influence the achievement of these Objectives, which can ultimately lead to the accomplishment of end outcomes and strategic goals. Measures with Objectives are reviewed annually or more frequently, when appropriate, by monitoring target levels. Measures arereported with FSA’s Performance Budget. Measures aredirectly linked to senior managers’ performance.

20. Outputs and Employee Performance Measures Products and services of the Agency. Activities performed by employee that lead to outputs or products and services. Measures set by employee’s manager specifically for employee. Measures linked to employee’s performance. Employee measure falls under Agency’s performance measure.

21. Example: How Do Employees Link to the Strategic Plan? Agency Strategic Goal 3: Conserving Natural Resources and Enhancing the Environment END OUTCOMES AGENCY END OUTCOME 1: Quality Soil INDICATOR 1: Reduced erosion rates. INTERMEDIATE OUTCOMES SENIOR MANAGER PLAN OBJECTIVE 1: Improving Conservation Practices MEASURE 1: Maintain or increase % of acres in compliance with highly erodible land and wetland provisions. PRODUCTS and SERVICES EMPLOYEE PLAN OUTPUT: Spot-checks for Conservation Compliance

22. From Annual Performance to Strategic Plan FSA - PERFORMANCE BUDGET/ APP SES/GS 15,14 PLAN EMPLOYEE ACTIVITIES EMPLOYEE PLAN MID-LEVEL MANAGER PLAN PROGRAM OR OPERATING MEASURES FSA OBJECTIVES FSA END OUTCOMES FSA STRATEGIC GOALS FSA VISION FSA MISSION

23. Strategic Goal Linkage - FSA to USDA to FSA NEW FSA FY 05-11 Strategic Plan OLD FSA FY 01-05 Strategic Plan Strategic Goal 1 Provide farm income support to eligible producers, cooperatives, and associations to help improve the economic stability and viability of the agricultural sector and to ensure the production of an adequate and reasonably priced supply of food and fiber. Strategic Goal 3 Assist eligible individuals and families in becoming successful farmers and ranchers. Strategic Goal 4 Improve the effectiveness and efficiency of commodity acquisition, procurement, storage, and distribution activities, and administer the U.S. Warehouse Act (USWA). USDA FY 02-07 Strategic Plan Strategic Goal 1 Promoting Productive Farms and Ranches Strategic Goal 2 Supporting Secure and Affordable Food and Fiber Supply Strategic Goal 1 Enhance Economic Opportunities for Agricultural Producers Strategic Goal 2 Assist agricultural producers and landowners in achieving a high level of stewardship of soil, air, and wildlife resources on America’s farms and ranches while protecting the human and natural environment. Strategic Goal 5 Protect and Enhance the Nation’s Natural Resource Base and Environment Strategic Goal 3 Conserving Natural Resources and Enhancing the Environment 9

24. FY 2006 President’s Budget Strategic Goal Linkage – FSA to USDA

25. FY 2006 President’s Budget Strategic Goal Linkage – FSA to USDA, Continued

26. SAMPLE Performance Measure Crosswalk FY 05 BPI FY 06 BPI Goal 1: Maintain or reduce loss rates for: - Direct loans - Guaranteed loans Goal 1: Reduce average processing time for: - Direct loans - Guaranteed Loans Goal 1: Increase % of: - beginning farmers - racial and ethnic minorities, and women farmers financed by FSA. Goal 3: Direct loan loss rate (%). Goal 3: Guaranteed loan loss rate (%). Goal 3: Processing time for direct loans (%). Goal 3: Processing time for guaranteed loans (%). Goal 3: Loans to beginning and socially disadvantaged farmers (% of total lending). Goal 3: Direct loan delinquency rate (%). Goal 3: Borrowers graduated from direct loans to guaranteed loans (%).

27. SAMPLE Performance Measure Crosswalk USDA FY02-07 Strategic Plan FY06 BPI BPMS Management Scorecard: Reduce % of skills gaps in mission critical occupations. Reduce average processing time to fill vacancies. Increase % of employees that meet the homeland security training standards. Reduce average time to certify and disburse payments. Reduce % of erroneous payments. Increase % of material weaknesses that are corrected on schedule. Increase % of transactions completed through a web environment. Increase % of program results and budget requirements that are linked to the FSA Strategic Plan and fully costed. Management Initiative 1: Improve human capital management. Management Initiative 2: Improve financial management. Management Initiative 3: Expand electronic government. Management Initiative 4: Establish budget and performance integration.

28. BPMS Milestones Department and OMB Approval of Strategic Plan Framework Incorporation of Framework into FY 2006 Performance Budget Linkage of Employee Performance to FY 2005-2011 Strategic Plan Development of BPMS Intranet (internal) and Internet (public) Websites Development of Interim Web-based Performance/Budget Reporting System Release of Draft Strategic Plan for Public Comment • Vendor Demonstration of INTEGRATED Web-based Budget, Performance, and Cost Accounting Data System • Development & Implementation of INTEGRATED Web-based Performance Reporting System • Implementation of Strategic Plan • Measure Customer Satisfaction • Measure Effectiveness of Partnerships • Streamline Business Processes • Develop & Implement Tiered Employee Performance System • Leverage Resources through Partnerships

29. TRANSFORMATIONChallenges • Institutes MAJOR cultural change – performance based. • Requires integrated change management and will facilitate an integrated process for realigning resources. • Requires continued commitment and support from all levels.

30. Questions? Comments? Visit BPMS Internet Site at: www.fsa.usda.gov/bpms For answers to your questions or to send a question directly to the Agency, please visit : www.fsa.usda.gov/performance

31. Farm Service Agency