OMB's one-face approach

Agencies find 'one government' to be a disruptive, but not unreasonable, concept

Editor's note: This story was updated at 3:30 p.m. Sept. 6, 2007. Please go to Corrections & Clarifications to see what has changed.

The “one government” concept behind the administrative policies of the Office of Management and Budget under President Bush is best illustrated by a negative example: the inability of the Defense and Veterans Affairs departments to easily share medical records when service members leave active duty and enter the VA health care system.

For years, each department has maintained its own customized health care information system, and getting electronic health records transferred from DOD to VA has never been easy. The departments have made some headway in sharing medical records, but much work remains to make DOD and VA respond as one government to service members’ needs, many observers say.

The standardization and integration that DOD and VA must implement to fulfill OMB’s vision of one government are, to a certain extent, similar to those OMB would like all federal agencies to make.

That one government concept “is terribly disruptive, and it challenges all of your assumptions,” said Ed Meagher, VA’s former deputy chief information officer who is now deputy CIO at the Interior Department. Meagher said OMB has set the right course. “We’ve got to make these changes. It’s just [that] when you’re in the middle of it, it’s not pretty.”

Meagher said senior executives who work outside the CIO’s office don’t fully understand the administrative changes that OMB has been pressing agencies to make. “Right now, we’re seen as disrupters,” he said, because many senior leaders don’t yet see the benefits of OMB’s e-government and line-of-business initiatives. LOB initiatives refer, for example, to the consolidation of financial management, information security or infrastructure services.

In many cases, no one has adequately explained or justified the business initiatives to senior-level decision-makers, Meagher said.

Some public policy experts say resistance to OMB’s consolidation initiatives is not surprising, given some deeply ingrained traditions.
“Americans like fragmented authority, with checks and balances,” said Jonathan Breul, executive director at the IBM Center for the Business of Government. The early federal organization was consciously designed to be inefficient, he said.

Service-level agreements
It is likely that OMB could fall short of achieving its one-government agenda, Breul said. The biggest difficulty is sustaining the effort given the turnover of policy and career officials, he added.

An important factor in agencies’ willingness to participate in OMB’s line-of-business consolidation will be their confidence that they can manage shared-services providers through service-level agreements and performance-based contracts, said Mark Forman, a partner at KPMG and former OMB administrator for e-government and information technology.

A reasonable way to look at OMB’s governmentwide initiatives is in terms of trade-offs, Forman said. When federal agencies use a public or private shared-services provider, as OMB has urged, they will lose control over some aspects of their administrative operations but save time and money, he said.

OMB has not wavered from its commitment to a one government management agenda. By offering government-wide administrative services through various lines of business consolidation, OMB has freed agencies to focus on their mission-critical programs, said Karen Evans, OMB’s administrator for IT and e-government.

OMB officials say they have made substantial progress toward what they hoped to achieve with the one government focus. “The forward-leaning agencies have embraced this — not because it’s an OMB i nitiative but because it makes good business sense,” said Tim Young, OMB’s associate administrator of e-government and IT and manager of the governmentwide e-Payroll initiative.

Payroll processing
E-Payroll is one of OMB’s business consolidation success stories. Nearly all federal agencies now participate in e-Payroll. The government, which used to operate 26 payroll systems, now has four agency payroll providers.

Because of e-Payroll, annual federal payroll processing costs have dropped by about 40 percent, Young said. The Health and Human Services Department, for example, which had been paying $259 per employee for payroll processing, now pays $90 per employee.

Change is disruptive, Young said. “No one really wants to change.” However, most federal agencies now feel they can entrust payroll processing to someone else, he said. “The only thing that matters on payroll is that people get paid [on time] and accurately.”

Another success story, OMB officials say, is Grants.gov. No federal agency would now think of starting its own grant notification program, Evans said. Instead, it would go to Grants.gov, another governmentwide program initiated by OMB.

The effort to achieve one government through a variety of consolidation initiatives has been disruptive, government experts say. “The initial change from paper to automated systems wasn’t nearly as disruptive as what we’re trying to do now, which is to homogenize the process behind the scenes,” Meagher said.

Most agencies are willing to accept a one government view because they know it is inevitable, Young said. However, the ultimate validation of the Bush administration’s one government approach will be when OMB is not in the center of the ring cracking the whip, he said. Instead, agencies will decide on their own to behave as parts of one government.

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