FY 2005 Performance Budget Justification
Appendix A: President's Management Agenda
The PMA is a sound agenda for government reform that resonates with the Commission's long-standing focus on responsiveness and effectiveness. As a small partnership organization, ARC has capitalized on its unique advantages for 38 years:
While ARC's small, specialized organization works well to address its mission, it also imposes certain limitations. Increasing external demands for detailed planning and compliance reporting seldom distinguish between micro-agencies and very large executive agencies. For example ARC can and does provide appropriate state-of-the-art IT security envisioned by FISMA and similar requirements. However, the formal internal studies, documentation, and compliance reporting primarily intended for large agencies are inordinately expensive and disruptive in an organization with an IT staff of one or two. The management challenge to ARC is to respond to such requirements within its resources.
ARC recruits successfully from both the private and public sectors to fill its nonfederal vacancies. The Appalachian Act specially provides that federal employees leaving a federal agency may accept a nonfederal ARC position and retain federal employee benefits. ARC nonfederal human resource policies also provide employment packages that are reasonably competitive with the private sector. For example, ARC instituted as early as 1992 a banded salary structure with pay incentives very similar to options that are only recently being considered at some of the larger federal agencies. ARC also has an excellent record of employee retention. Succession planning for senior management and technical staff is an issue for relatively few positions, and it can be addressed on a predictable basis. The Commission has also gradually adapted staff skills and makeup in anticipation of increased use of technology in business processes. The state and federal members expect a high degree of technical competence, so the organization values and promotes employee training and professional development in relevant program fields.
ARC has only eleven federal positions, all performing work in direct support of the Office of the Federal Co-Chair and the OIG. Two of these positions are PAS and two are Schedule C. ARC's inventory of federal positions is posted on the agency website. While not directly relevant to FAIR, it is important to note that ARC consistently employs competitive sourcing in major procurement, especially in its research business function.
Unlike many small agencies, ARC maintains written guidelines for financial management and internal control, and has moved aggressively in recent years to update core accounting and financial management functions. During FY 2003, the Commission engaged KPMG to review and reassess accounting policies. ARC also engaged another accounting firm to conduct an audit in accordance with the recommended standards. In addition, ARC conducted routine assessments of internal control procedures in keeping with FMFIA. Although the Accountability of Tax Dollars Act does not technically apply to ARC because it is not an executive agency under U.S.C. 5 and 31, the Commission is prepared to produce timely and accurate audited financial statements as directed by OMB. OMB waived the need for quarterly statements for FY 2002, but ARC has completed an audited statement as of September 30, 2003 with an unqualified opinion from the independent auditor. The Commission OIG has been closely involved in all these developments in financial management.
Budget and Performance Integration
ARC moved promptly in 1995 to complete a strategic plan under GPRA based on extensive policy meetings, field hearings, workshops, and consultancies. Concurrently, ARC worked with member states, some of which already had performance measurement systems in place, to design and conduct performance assessments for GPRA reporting. The Commission formally submitted annual performance plans and reports as part of the budget for the 2003 and 2004 budget cycles. During FY 2002 and 2003, ARC trained key staff in current developments in performance measurement, continued discussions with the state and federal policymakers, and examined measurements used by other agencies. The newly appointed Federal Co-Chair has initiated additional discussions with OMB to further strengthen measurement for the 2005 cycle. The Commission also engaged outside experts to advise on integration of budget and program performance. A new strategic plan is scheduled for the coming year, along with additional performance measurement protocols.
ARC seeks to apply appropriate and affordable technology to improve services in all its business processes. For example, an on-line grant information system now provides real-time detailed information to staff professionals and state partners. A revamped web site provides all public documents in electronic form, as well as a new on-line resource center that makes staff expertise readily available to community leaders in Appalachia. Virtually all vendor and grantee payments are electronic. An on-line time and attendance system simplifies HR management, eliminates paperwork, and interfaces directly and accurately with the USDA National Finance Center for payroll purposes. ARC fully participates in the Treasury GOALS I and GOALS II on-line reporting systems. The Commission continues to monitor major cross-agency information technology projects, particularly Grants.gov and eTravel. ARC obviously does not have the resources or mission to absorb the initial development costs of such large-scale cross-agency products, but will be able to deploy them expeditiously when they are available and if client costs are not prohibitive.