Activities Oversight Team Meeting

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Activities Oversight Team Meeting FY06 Topic
Discussion 9 March 2006
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Capturing HSPD-12 Costs in ABC
Question from OSM Should there be separate
Dept. ABC work activities for HSPD-12? Where
should HSPD-12 related costs be reflected in
DOI ABC work activities? Decision use existing
DOI work activities to capture HSPD-12 costs

• Capture costs against Sustain the Organization
  activities
• DOI work activity 61 Support Human Resources
  Activities for processing
• govt personnel security clearances
• DOI work activity 63 Provide Procurement
  Services for processing
• contractor security clearances
• DOI work activity 64 Provide Facilities and
  Space Mgmt Services for
• equipment costs
• DOI work activity 83 Secure IT
• Most of what we have discussed are HSPD-12
  start-up costs as we continue to
• operate enhanced security processes, the
  HSPD-12 costs will become routine
• operating costs for physical security and IT
  security
• Separate HSPD-12 costs from other activity
  costs thru use of project codes

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Linking DOI Work Activities to the Strategic Plan
Proposal Make all direct DOI work activities
cross-cutting, i.e. any direct DOI work activity
can link to any end outcome goal, or multiple
end-outcome goals

• Current method of linking one DOI work activity
  to only one end outcome goal
• too rigid linking work with end outcome
  goal on best fit basis
• End outcome goals should show work done to
  execute it
• Association will be based on bureau work
  activity linkage to end outcome goal
• association of bureau work activity to end
  outcome goal will drive linkage of
• DOI work activity to end outcome goal
• Use bureau cross walks and bureau-provided
  algorithms/percentage allocations
• to cost DOI work activities to goals
  (algorithms/percentage allocations must
• have rational basis not guestimates)

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Linking DOI Work Activities to the Strategic Plan

• Decisions
• Need to capture the bureau work activity under
  the right DOI work activity AND under
• the right end outcome goal
• If linking one DOI work activity to one end
  outcome goal works, the bureau need not
• change how they are linking their work
  activities to the DOI work activities and end
• outcome goals
• Issues
• How do you tie this to the budget? How do you
  tie the budget line items to the end
• outcome goals if the method for costing end
  outcome goals changes every year?
• Will the allocations to goals and/or
  algorithms change every year?
• Can bureaus produce a valid statistical analysis
  on which to base their allocations/
• algorithms? If the answer is no, what is
  the alternative?
• Will the methodology proposed here withstand
  scrutiny (audit)?
• How many and which DOI activities need to link
  to more than one end outcome goal?
• When is the Dept proposing to implement this
  initiative?

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Treatment of Outputs Produced Over Multiple
Fiscal Years
Question from USGS If an activity takes a
number of fiscal years to produce one output, how
do you count the output over the years of
production, particularly when calculating an
annual unit cost?

• Three alternatives for consideration
• Break down the activity further into separate
  activities that produce an
• output over one years time
• Consider the number of units in production
  during the year and the
• activity costs as being the costs generated by
  all units in production
• during the year (including the units completed
  during the year)
• Roll up the costs of the activity to a higher
  level product or service
• and count only the units of the higher level
  product or service (this
• presumes the higher level product or service
  is not also a multi-year
• product or service)

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Budget, Cost and Performance Initiative
Engaging the Effort
Question How should the DOI ABC work activities
link to performance measures in the Strategic
Plan?

• Are any bureaus costing performance measures
  now? Yes, relating to output
• measures in the strategic plan (e.g. acres
  restored)
• How are the costs for these measures determined?
  
• Is there a relationship between these output
  measures in the strategic plan
• and the workload output measures in ABC?
• Is there a relationship between the output and
  outcome measures in the
• strategic plan?
• If output and outcome measures are related,
  can the outcome measures be
• costed through the related output measures?

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Budget, Cost and Performance Initiative
Engaging the Effort

• Decisions
• Need to prove whether we can or cannot cost
  measures meaningfully
• Need phased-in approach to test concept
• Issues
• What compels costing performance measures?
• Will the method be auditable?
• If performance measures are auditable, would not
  linking cost to performance measures
• subject ABC to audit?
• Should we pilot this initiative in some bureaus
  to see if it can be done?
• Most bureaus dont have valid cost data and
  cant determine the unit cost for their own
• outputs
• Information may not be valuable at SES lvl
• What is budget sensitivity of costing measures?
• How to handle phased and shared measures?
• Fix the coding issues first before proceeding
  further

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Why Cost Measures?
We want to know how various funding sources
contribute to achieving a targeted level of
performance, what level of performance was
achieved from the work done, and how to use this
knowledge to inform how our programs should be
resourced.

• Linking activities to end outcome goals and
  intermediate strategies doesnt tell us
• the cost of achieving specific targeted
  levels of performance.
• Linking work activities to performance measures
  associates work done with the
• measurable units of what results from work
  done
• Costing performance measures is how we can
  determine the marginal cost of
• changing performance
• A-11 states that to do performance budgeting
  requires linking strategic goals with
• related long-term and annual performance
  goals, and with the costs of specific
• activities that contribute to the
  achievement of those goals. Performance goals
• are performance measures with targets and
  timeframes.
• DOI has yet to successfully demonstrate that it
  can accurately estimate the marginal
• cost of changing performance
• We dont want to appear as though we are more
  concerned about conducting the
• activity than whether or not we are
  achieving the end result. We must be able to
• demonstrate that we are performing
  efficiently and effectively.