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Wednesday, February 21, 2007

Budget formulation needs sharper tools than spreadsheets, scholars say

The federal budget process is stuck in an era of convoluted Excel spreadsheets, and could benefit from more sophisticated planning and analysis technology to meet the growing demand for integration with data on program performance, according to two budget scholars.

In a new book on "the budget office of tomorrow," Jonathan Breul, a senior fellow with the IBM Center for the Business of Government, and Carl Moravitz, a managing consultant with the center, argue that Internet-based "performance scoreboards" and "dashboards" that give instant, dynamic readouts of key business information are the kinds of budget tools needed to inform federal officials' day-to-day decisions.

The authors point to the traffic-light-style score card used in the President's Management Agenda as an example of a quick-read tool that synthesizes complex program information. They said more and more complex options are in demand.

The work that falls to budget offices has greatly expanded over the last 20 years, largely because of new requirements contained in legislation such as the 1993 Government Performance and Results Act and the 1990 Chief Financial Officers Act, Moravitz said. But budget processes have remained largely the same, he said.

More sophisticated tools would help managers answer such questions quickly and easily by dynamically tracking key data points, eliminating the need to dig through spreadsheets and potentially update numbers to answer questions.

Breul said OMB has increasingly focused on the integration of budget and performance data -- through the Program Assessment Rating Tool for example. But it is also important to link performance with backward-looking program costs, as well as forward-looking projections, he said.

Based on a 2005 study of nearly 900 chief financial officers at public and private organizations, they argued that the implementation of standard policies, common processes, process simplification and best practices is more rapid at high-performing organizations than at lower-performing ones. "The need for and benefits of these sorts of changes are every bit as applicable to budget officers as they are to finance organizations," they wrote.

"The important end state is to tie together the total process of developing, securing and managing budget resources" to support decision making and resource management, they said.

-Jenny Mandel, GovExec.com

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