With its February 7, 2005, release of the President’s proposed FY06 budget, the Office of Management and Budget (OMB) marked the three-year anniversary of its Program Assessment Rating Tool (PART), an aspect of the President's Management Agenda (PMA) that evaluates the performance and management of existing government programs. While the PART program has generally experienced forward progress in its first three years, it still has a long way to go.

FY06 PART Analysis
PART currently captures 607 programs, representing approximately 60 percent ($1.4T) of the FY06 budget. Of those programs, 219 were newly evaluated for the FY06 budget, with the remaining 388 programs having been evaluated previously. While programs evaluated under PART generally are becoming significantly more measurable and gradually improving over time, a full 33 percent of PART programs are ineffective or cannot demonstrate results after three years.

Cumulative PART Results by Ratings Category, FY04-FY06

However, PART is starting to show some more bite. With the FY06 budget, 48 programs (versus 7 in FY05) totaling $11B in actual FY04 costs were recommended for elimination. Of the surviving programs that were rated ineffective, there was an average 26 percent cut in funding. President Bush also warned that PART will have greater impact moving forward: "Particularly in a period of tight budgets, these programs must improve their performance, or their resources may be moved to higher performing programs."

At the same time, as the following analysis of top and bottom performers indicates, there is not yet a direct link between PART performance and funding changes.

Selected PART Program Results

*OMB and individual agencies go through yes/no questions that evaluate program performance in four OMB-weighted areas: purpose (20%), strategic planning (10%), program management (20%), program results (50%). This evaluation is translated into a numeric score for each area and overall program effectiveness.

**FY06 requested funding compared to FY05 enacted funding.

Does PART Selection Equate to Funding Cut?
Some question if selection for PART inclusion translates directly to program funding cuts. Micro analyses—of funding type, program type, or year first selected for PART inclusion—turns up some interesting questions. Macro analysis of PART data, however, does not support this theory.

For example, an analysis of the nine DoD programs newly evaluated with the FY06 budget could support a concern that PART inclusion, regardless of rating, leads to funding reductions. Of these nine programs, all were rated in the two highest categories (effective or moderately effective), yet six had funding cuts proposed for FY06, even though the FY06 budget proposes an overall DoD spending increase of five percent.

These concerns are not supported, however, at the macro level. An analysis of the 16 agencies/departments that account for approximately 97% of funding captured via PART in FY06 demonstrates no direct link between PART inclusion and funding changes. In 7 of the 16 agencies analyzed, PART programs received less funding than programs not assessed by PART, while 5 agencies’ PART funding was consistent with overall agency funding, and 4 agencies’ PART programs received more funding then programs not assessed by PART.

*Cumulative enacted FY05 funding compared to requested FY06 funding.
**Current Services Budget Authority.
***This includes all 23 DoD PART programs.

Overall, this analysis indicates there is no consistent link between programs selected for PART assessment and funding. However, the DoD example cited above may not be an anomaly. Moving forward, it would be worthwhile for agencies to take a hard look at the connections between PART selection and funding trends by funding type (e.g. discretionary), program type (e.g. direct federal), or class (year first assessed) and carefully focus on how a PART program is defined and selected.

New Developments Affecting PART
There are several emerging developments affecting PART that government managers should keep an eye on in CY05.

• OMB will place greater emphasis on the implementation of PART improvement recommendations moving forward: "While the Administration believes that an increasing number of programs will earn 'effective' ratings, we also stress that PART recommendations are more important than PART ratings because the focus of PART is on continuous improvement of program performance," the White House stated in the budget request. Accordingly, OMB will begin tracking recommendations using a web-based system sometime in CY05.
• To facilitate the process of cutting wasteful programs, President Bush has asked Congress to establish two program evaluation commissions, a Sunset Commission (a la the Divestiture Commission) and a Results Commission to improve the performance of programs or agencies by restructuring or consolidating them. Both are expected to receive congressional approval.
• Until now, Congress has largely ignored PART, but that is changing. Rep. Platt (R-PA) and Rep. Davis (R-VA) introduced legislation (H.R. 3826) in February 2004 amending the Government Performance and Reporting Act (GPRA) to require regular PART-like evaluation of all federal programs at least once every five years using a “cross-cutting” strategy where like programs are reviewed each year. The legislation also mandates updates of agency strategic plans every four years (versus the current mandate of every five years). H.R. 3826 made it out of Committee in October 2004 and was also introduced as S. 2898. It was reintroduced as H.R. 185 as part of the new congressional session (109th) in January 2005. Its passage will effectively provide congressional endorsement of PART and make assessments a permanent fixture in government policy.